Economy: ISM Manufacturing Index for March 2020

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for March 2020:

Predicted: 44.0%

Actual: 49.1% (-1.0 point month-on-month change)

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Previous month: 50.1%

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Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

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From Today's Report:

"...Economic activity in the manufacturing sector contracted in March, and the overall economy grew for the 131st consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®..."

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The following is a sampling of quotes from a diverse pool of U.S. manufacturers:

“COVID-19 is impacting China’s raw material supply chain. We are now seeing revenue impact in that region. Our operations team is reviewing plans for spread of the virus.”
(Computer + Electronic Products)

“The two main issues affecting our business [are] COVID-19 and the oil-price war. We are in daily discussions and meeting constantly, updating tracking logs to document high risk concerns.”
(Chemical Products)

“COVID-19 impact has extended to Europe and North America. The virus escalation is affecting our purchasing and logistics operations. We have incurred air-shipment and production interruptions due to shortages of raw materials and components.”
(Transportation Equipment)

“We are experiencing a record number of orders due to COVID-19.”
(Food, Beverage + Tobacco Products)

“World demand for petroleum products is declining, while supply is ramping up. We have lost supply chain visibility to certain locations.”
(Petroleum + Coal Products)

“COVID-19’s spread in the U.S. may start impacting our domestic business. As for Asian suppliers, they are starting to get back up to speed.”
(Fabricated Metal Products)

“COVID-19 has caused a 30-percent reduction in productivity in our factory.”
(Machinery)

“A big part of our business is hospitality, and we are seeing demand drop and an increase in cancellations.”
(Nonmetallic Mineral Products)

“All North American manufacturing plants have ceased operations or drastically scaled back as a result of customer plant closings and other responses to COVID-19.”
(Plastics + Rubber Products)