March 2018 Manufacturing Survey Growth Little Changed

Written by Steven Hansen

The ISM Manufacturing survey insignificantly declined and remained in expansion. The key internals are in expansion. The Markit PMI manufacturing Index is in positive territory and insignificantly improved.

Analyst Opinion of the ISM Manufacturing Survey

Based on these surveys and the district Federal Reserve Surveys, one would expect the Fed’s Industrial Production index growth rate remain about the same as last month. Overall, surveys do not have a high correlation to the movement of industrial production (manufacturing) since the Great Recession.

From Bloomberg / Econoday:

Consensus Range Consensus Actual Markit Manufacturing 55.7 to 55.7 55.7 55.6 ISM Manufacturing 58.8 to 61.0 60.0 59.3

From the Markit PMI Manufacturing Index:

March PMI indicates strongest manufacturing growth for three years

PMI rises to highest since March 2015

Output and new orders continue to increase markedly

Input costs rise to the greatest extent since November 2012

March PMI survey data signalled a strong overall improvement in operating conditions across the U.S. manufacturing sector. Output and new orders continued to rise markedly, despite rates of growth softening slightly since February. Job creation also remained strong and backlogs of uncompleted work increased solidly as a result of the recent upturn in client demand. Business confidence about the year ahead meanwhile rose to the highest since February 2015.

Inflationary pressures intensified, however, with rates of both input price and output charge inflation accelerating to multi-year peaks. The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) registered 55.6 in March, up from 55.3 in February. The latest PMI reading indicated the strongest improvement in manufacturing business conditions since March 2015. The average PMI reading over the opening three months of 2018 meanwhile indicated the best quarterly performance since the third quarter of 2014.