Manufacturing expanded in March, according to the S&P Global Flash U.S. Manufacturing PMI. NAM Chief Economist Chad Moutray broke it down for us.
The topline: “The S&P Global Flash U.S. Manufacturing PMI rose from 57.3 in February to 58.5 in March, with output (up from 52.5 to 56.5) expanding at the strongest pace since August,” said Moutray. “New orders (up from 57.0 to 58.0), exports (up from 53.4 to 54.6) and employment (up from 52.2 to 53.7) also improved for the month, which was encouraging.”
The outlook: “The index for future output (77.9) was unchanged, remaining at the strongest reading since November 2020, pointing to optimism about production moving forward,” said Moutray.
The challenges: “Yet, manufacturers continued to cite supply chain bottlenecks and workforce shortages as significant challenges to growth, and delivery times (up from 25.2 to 28.7) remain too long, even with some easing in March,” said Moutray. “There is also ‘growing concerns about the Ukraine war’ among respondents.”
Mixed news on inflation: “Inflation continued to be highly elevated overall despite pulling back from recent record highs, including for both input costs (up from 79.2 to 79.7) and output prices (down from 70.9 to 69.5),” said Moutray.
Across the pond: “Meanwhile, the S&P Global Flash Eurozone Manufacturing PMI decreased from 58.2 in February to 57.0 in March, the slowest pace of growth since January 2021,” said Moutray. “The Russian invasion of Ukraine negatively impacted activity, with decelerating expansions for new orders, output and hiring. Exports contracted for the first time since June 2020, and the index for future output (down from 68.5 to 53.8) eased sharply to the lowest reading since May 2020. Supplier delivery times (down from 31.0 to 25.1) worsened, and input prices (up from 82.0 to 86.5) remained not far from the record pace in October (89.5). Manufacturing activity also slipped in France, Germany and, outside the Eurozone, in the United Kingdom.”