[MARKETPU LS E]
which means several are holding at 50 or above. The decrease in
these indexes is not attributed to one specific thing. I think it’s fairly
broad support for growth, just not as strong as we saw on the first
couple of months. That’s not necessarily a bad thing because we can’t
sustain continuous climbing. It’s more realistic to expect you can have
some ups and downs along the way.”
The Inventories Index registered 49. 5 percent in March, which is 2 per-
centage points lower than the 51. 5 percent reported in February. This
month’s reading indicates that respondents are reporting inventories
are contracting in March, following two consecutive months of growth.
“The inventory index doesn’t indicate anything except for good inventory management,” explains Holcomb. “I would expect to see it a
little bit below 50 percent for most of the year. That’s on purpose, as
people want to contain costs and avoid getting caught with obsolete
Exports, Imports and Prices
ISM’s New Export Orders Index registered 56 percent in March,
which is 2. 5 percentage points higher than the 53. 5 percent reported
in February. This month’s reading represents the fourth consecutive
month of growth in new export orders, and follows six months of
contraction dating back to June 2012.
ISM’s Imports Index registered 54 percent in March, which is the same
reading as reported in February. This month’s reading indicates that
import levels are growing for the third time in the past four months.
“The ISM index for exports did pick up in March,” said Daniel
J. Meckstroth, chief economist for the Manufacturer’s Alliance for
Productivity and Innovation (MAPI), “but it is hard to believe that net
exports are driving manufacturing growth when Europe and Japan
are in recession and China is just starting to accelerate after a growth
slowdown last year. MAPI predicts that manufacturing production
will perform only slightly better than overall GDP growth this year.
Manufacturing industrial production is forecast to increase 2. 2 per-
cent in 2013 and accelerate to 3. 6 percent growth in 2014.”
The ISM Prices Index registered 54. 5 percent in March, which is
a decrease of 7 percentage points compared to the February read-
ing of 61.5 percent. In March, 21 percent of respondents reported
paying higher prices, 12 percent reported paying lower prices, and
67 percent of supply executives reported paying the same prices as
in February. A Prices Index above 49. 7 percent, over time, is gener-
ally consistent with an increase in the Bureau of Labor Statistics (BLS)
Index of Manufacturers Prices.
In his role as the chair of the Institute for Supply Management Manufacturing Business Survey Committee, Bradley J. Holcomb writes the monthly
Manufacturing ISM Report on Business based on the survey results of approximately 350 professionals across 18 different industry sectors. For more
information on the Institute of Supply Management, visit www.ism.ws.