Input Stories

Building permits rose 1.6% in March but fell 0.2% over the year. Permits for single-family homes in March declined 2.0% from February and slipped 0.6% over the year. Meanwhile, permits for buildings with five or more units increased 10.1% from February but decreased 0.9% over the year.

In March, housing starts fell 11.4% from February but rose 1.9% from March 2024. Similarly, starts for single-family homes slumped 14.2% from February and declined 9.7% from March 2024. Meanwhile, starts for buildings with five or more units were flat over the month but soared 47.8% over the year.

Meanwhile, housing completions decreased 2.1% over the month but rose 3.9% over the year. On the other hand, single-family home completions grew 0.9% from February and 9.6% from March 2024. Completions for buildings with five or more units fell 8.2% over the month and 4.4% from one year ago.

U.S. import prices fell 0.1% in March, after increasing 0.2% in February, with higher nonfuel prices offsetting lower fuel prices. This is the first monthly decline since September 2024. Over the past year, import prices rose 0.9%. Meanwhile, U.S. export prices were flat in March, following a 0.5% rise in February. Over the past year, export prices increased 2.4%.

Fuel import prices fell 2.3% in March, after rising 1.6% in February. Lower prices for natural gas and petroleum led to this decline. Prices for fuel imports dropped 5.2% over the past year. Import prices for petroleum decreased 1.5% over the month in March. Meanwhile, natural gas prices plummeted 19.8% in March but jumped 88.5% over the year.

Nonfuel import prices ticked up 0.1% in March, for the second consecutive month. Higher prices for capital goods; nonfuel industrial supplies; and foods, feeds and beverages more than offset lower prices for consumer goods and automotive vehicles in March. The price index for nonfuel imports increased 1.5% over the past year.

After rising 0.6% in February, agricultural export prices were unchanged in March. Over the past 12 months, agricultural export prices increased 1.4%. Meanwhile, nonagricultural export prices edged down 0.1% in March, the first decline since September 2024. Higher prices for consumer goods, capital goods and automotive vehicles were offset by lower prices for nonagricultural industrial supplies and materials and nonagricultural foods. Over the past year, nonagricultural export prices advanced 2.5%.

Manufacturing activity in New York state continued to decline in April. While the headline general business activity index rose from the previous month, it remained negative at -8.1. New orders and shipments also continued to contract but at a slower rate than the previous month, with new orders increasing from -14.9 to -8.8 and shipments rising from -8.5 to -2.9. Unfilled orders grew from -2.0 to 4.1, while inventories fell from 13.3 to 7.4. Delivery times ticked down from 1.0 to 0.0, while supply availability dropped from -1.0 to -5.7.

The index for the number of employees, still in negative territory, edged up from -4.1 to -2.6, but the average employee workweek dropped from -2.5 to -9.1. Meanwhile, both input and selling price increases picked up, reflected in the prices paid index rising 5.9 points to 50.8, the fastest pace of increase in more than two years, and the prices received index advanced 6.3 points to 28.7.

Firms are less optimistic than they have been in previous months. The index for future business activity decreased 20.1 points to -7.4, falling a cumulative 44 points in the past three months. Employment and the average employee workweek are forecasted to weaken, continuing a trend from the previous month. New orders are anticipated to decrease, falling from 15.5 to -6.6, and capital spending plans are flat. Input prices are expected to remain high. Meanwhile, supply availability is forecasted to continue to contract in the next six months.

In April, Philadelphia’s regional manufacturing activity declined after modest increases the previous month. The index for current general business activity fell from 12.5 to -26.4, the third consecutive monthly decline in the index and the lowest reading since April 2023. Nearly 39% of firms reported decreased activity this month, while 12.5% saw increases in April compared to 18.1% reporting increases in March. Meanwhile, 40.6% experienced no change. The indexes for new orders and shipments both plummeted from 8.7 and 2.0 to -34.2 and -9.1, respectively. On the other hand, employment expectations were steady, following a surge in March. The average employee workweek index dropped from 8.7 to -12.7.

The prices paid index edged up from 48.3 to 51.0, the highest reading since July 2022, while the prices received index ticked up one point to 30.7. As has been the case for many months, the prices received index remains lower than the prices paid index, indicating manufacturers have been absorbing a sizable portion of those higher costs paid.

Looking ahead, future indicators were mixed. The index for future general business activity rose from 5.6 to 6.9 in April. Compared to the previous month, a slightly higher proportion of firms (29.0%) expect decreases in activity, compared to last month’s reading of 25.8%, while 35.9% expect activity to improve. The future new orders index ticked up from 2.3 to 6.6 following March’s plunge, while the future shipments index edged down from 11.3 to 5.0. Meanwhile, the index for future employment tumbled from 17.3 to -0.6, the lowest reading since February 2016. The capital expenditures index fell from 13.4 to 2.0. The future prices paid index rose from 44.6 to 63.1, while the future prices received index surged from 39.7 to 67.7, indicating manufacturers hold heightened concerns about rising future costs.

Industrial production decreased 0.3% in March but was up 5.5% in the first quarter. Meanwhile, manufacturing output rose 0.3%, wherein growth in computer and electronic products, motor vehicles and parts and apparel and leather was partially offset by declines in wood products, textile and product mills and petroleum and coal products. At 103.9% of its 2017 average, total industrial production in March rose 1.3% from the same month last year. Capacity utilization slipped to 77.8%, down from last month, but increased 1.3% over the past year. Capacity remains 1.8 percentage points below its long-term average from 1972 to 2024.

In March, major market groups had mixed growth. Among consumer goods, the production of durables increased modestly at 0.5%, held down by a 2.0% decline in home electronics, while the index for nondurables fell 1.4%, with the greatest decrease in energy (-5.9%). The business equipment index improved 1.7% in March, with transit equipment up 4.5% after rising 8.6% in February and 7.7% in January.

Durable goods manufacturing advanced 0.6% in March, with a large decline in wood products (-3.0%) offset by increases in aerospace and miscellaneous transportation equipment (1.8%) and motor vehicles and parts (1.2%). Nondurable goods manufacturing was flat in March. Manufacturing capacity utilization rose 0.2 percentage points to 77.3% but remains 0.9 percentage points below the long-term average.

  The Manufacturing Leadership Council, the NAM’s digital transformation division, has announced its list of finalists for the Manufacturing Leadership Awards—an honor given to world-class manufacturing companies and leaders who are revolutionizing the industry’s digital capabilities.

The big reveal: All finalists will be celebrated at the ML Awards gala on June 18 in San Marco Island, Florida, where the winners will be announced.

• The awards given include the Future of Manufacturing Award, the Manufacturing Leader of the Year, the Small/Medium Enterprise Manufacturer of the Year and Large Enterprise Manufacturer of the Year.
• Manufacturers can also win awards in several categories, including artificial intelligence vision and strategy, business model transformation, collaborative ecosystems and more.
• Award nominations were judged by a distinguished group of manufacturing leaders from across the industry.
• You can see a complete list of finalists here.

Rethink: Ahead of the Awards gala, the MLC will be hosting Rethink, where manufacturing leaders gather to learn best practices and make connections. The star-studded lineup includes:

• A keynote address on digital transformation from Siemens USA President and CEO Barbara Humpton;
• A talk on “How Wall Street Views Digital Transformation in Manufacturing” by Goldman Sachs Managing Director, Technology, Media and Telecommunications Group Jack Anstey;
• An inside look at Hershey’s digital factory, featuring The Hershey Company Vice President of Manufacturing and Engineering and MLC Board of Governors member Will Bonifant; and
• Numerous case studies, best practice sessions, networking opportunities and more.

The last word: “In times of business uncertainty, manufacturers find that investments in digital technology can pay off for improving efficiency and overall performance and innovation,” said MLC Founder, Vice President and Executive Director David Brousell. “In our 21st season of recognizing excellence in Manufacturing 4.0, it is remarkable to witness the innovative methodologies that manufacturers are continually developing to propel their digital transformation initiatives.”

Join us: If you’d like to learn more about Rethink or register for the conference, go here.

The NFIB Small Business Optimism Index fell 3.3 points in March to 97.4, falling below the 51-year average of 98. March’s drop reflected the largest monthly decline since June 2022. Of the 10 components included in the index, only two increased, seven decreased and one stayed the same. The Uncertainty Index fell 8 points to 96 from February’s second highest reading of the index.

Labor quality was cited as the top concern for many small business owners in March, unchanged from February with 19% reporting it as the most important problem. In March, 40% of small business owners reported jobs they could not fill, up 2 percentage points from February. The challenge of filling open positions remains acute, particularly in manufacturing, transportation and construction. Taxes were the second most important concern, with 18% reporting them as their most important problem, up 2 points from February.

A net 38% of small business owners reported raising compensation, up 5 percentage points from February. Profitability remained under pressure, with a net negative 28% reporting positive profit trends, 4 points worse than in February. Of those reporting lower profits, 35% claimed weaker sales, while 18% cited ordinary seasonal adjustments. A net 26% of small business owners planned price hikes in March, down 6 percentage points from February after January had the highest reading in 11 months. On the other hand, 6% reported their last loan was harder to get than previous attempts, up 4 points from February and the largest monthly increase since September 2023, while a net 4% of owners reported paying a higher rate on their most recent loan.

The outlook for general business conditions fell 16 points to 21. The share of firms saying it is a good time to expand fell 3 percentage points to 9%. One thing is becoming clear: uncertainty is here to stay. This uncertainty has been causing turbulence in small business optimism. Since last October, “Expected Business Conditions” has moved from net negative 5% to net 52% in December, and now back down to net 21%.

The Producer Price Index for final demand (also known as wholesale prices) decreased 0.4% over the month in March, after inching up 0.1% in February. Over the year, producer prices moved up 2.7%, coming in lower than expectations. Prices for final demand excluding foods, energy and trade services ticked up 0.1% over the month in March, after increasing 0.4% in each of the previous three months. Prices for these goods advanced 3.4% from March 2024.

In March, prices for final demand services declined 0.2%, while prices for final demand goods dropped 0.9%. A 1.3% decrease in prices for machinery and vehicle wholesaling was a prominent factor in the March decline in the final demand services index. Meanwhile, two-thirds of the reduction in the final demand goods index can be attributed to an 11.1% drop in gasoline prices. On the other hand, prices for steel mill products increased 7.1% over the month in March.

Processed goods for intermediate demand stayed the same in March, following a 0.4% jump in February. A 0.9% increase in the index for processed materials less foods and energy offset price decreases for processed energy goods and processed foods and feeds, which fell 3.2% and 0.5%, respectively. Over the year, the index rose 0.9%, up from the 0.4% increase in February.

Meanwhile, prices for unprocessed goods for intermediate demand fell 4.1% in March, the largest decrease since May 2023 after three consecutive monthly increases. Nearly three-fourths of the March decline can be attributed to a 7.5% drop in the prices for unprocessed foodstuffs and feedstuffs. Additionally, the unprocessed energy materials index decreased 3.3%. Despite the monthly declines, prices for unprocessed goods for intermediate demand surged 7.1% from March 2024.

Consumer prices decreased 0.1% over the month but rose 2.4% over the year in March, slowing from the 2.8% over-the-year rise in February and coming in lower than expectations. Core CPI, which excludes more volatile energy and food prices, edged up 0.1% over the month and rose 2.8% over the year, the smallest 12-month increase since March 2021.

Shelter rose 0.2% over the month and 4.0% over the year, the smallest 12-month increase since November 2021. Meanwhile, energy costs fell 2.4% over the month in March, led by a 6.3% drop in the gasoline index. On the other hand, the decline in the gasoline index was offset by over-the-month increases in the indexes for natural gas (up 3.6%) and electricity (up 0.9%). Over the past 12 months, the energy index declined 3.3%. Meanwhile, prices for transportation services continued to edge down over the month (down 1.4%), but were still up 3.1% over the year, with motor vehicle insurance leading the increase, surging 7.5% over the year.

Food prices continue inching up, rising 0.4% over the month and 3.0% over the year in March. Although the food at home index grew 2.4% over the year, the underlying index for meats, poultry, fish and eggs increased 7.9% over the year in March. Driven by the bird flu outbreak, the index for eggs alone surged 5.9% over the month and 60.4% over the year. Meanwhile, food away from home rose 0.4% in March and was up 3.8% over the year.

As the over-the-year headline inflation rate remains elevated, markets are anticipating that the Federal Open Market Committee will keep rates steady at its meeting next month, but because of recent volatility in the markets, there’s less confidence in this expectation. Federal Reserve Chairman Jerome Powell said they’re likely to see a rise in inflation in coming quarters as higher tariffs will be working their way through our economy, and that their obligation is to make certain that a one-time increase in the price level does not become an ongoing inflation problem. These comments suggest that the Fed will likely keep its benchmark interest rate unchanged in the coming months, but if there were to be a liquidity issue induced by market volatility, that could shift the Fed’s decision-making.

On Wednesday, President Trump announced a 90-day pause of country-specific “reciprocal” tariffs above 10%, setting the “reciprocal” tariff rate at a flat 10%. However, he also announced an increase of additional “reciprocal” tariffs on Chinese imports, to 125%. The NAM’s trade team has the exact details for us.

Ninety days to negotiate: Trump’s executive order temporarily resets the additional country-specific ad valorem tariffs listed in Annex I of the April 2 executive order to a common 10% baseline, though previous exceptions still apply.

• The new rates went into effect on April 10, and the temporary reset applies until July 9, 2025, while the administration negotiates trade deals.

Higher tariffs on China: In response to China’s retaliation, the executive order increases tariffs on imports from China (and its administrative regions Hong Kong and Macau) into the U.S. from 84% to 125% as of April 10.

• The 125% rate is on top of the 20% additional rate on Chinese imports issued on Feb. 1, and in addition to any applicable Section 301 tariffs, Section 232 tariffs, MFN tariffs and AD/CVD tariffs.

De minimis: The April 2 EO laid out a new scheme for collecting tariffs on Chinese goods that would otherwise have been eligible for duty-free de minimis treatment, being valued at or below $800.The A pril 10 EO amends the previous order as follows:

•  From May 2, 2025, the tariff on postal items is increased from 90% to 120% of the package’s value or a flat fee per postal item.
• The flat fee is increased from $75 to $100.
• This flat fee was set to increase to $150 on June 1, 2025. This fee is now increased from $150 to $200.