- The Institute for Supply Management’s manufacturing index fell to 49.1 in March from 50.1 in February, it said in a Wednesday report.
- Bookings, employment, and production all fell sharply as the coronavirus pandemic hit business activity.
- “Comments from the panel were negative regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility,” Timothy Fiore, the chair of the ISM, said in a statement.
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US manufacturing orders and employment fell the most in 11 years in March as the coronavirus pandemic slowed business activity, signalling an economic contraction.
Institute for Supply Management data released Wednesday showed that the manufacturing index fell to 49.1 last month from 50.1 in February. Any reading under 50 indicates a contraction, or declining activity.
New orders or bookings fell 7.6 points, to 42.2, the lowest reading since March 2009, while the employment index slipped 3.1 points, to 43.8, its weakest since May 2009.
“The coronavirus pandemic and shocks in global energy markets have impacted all manufacturing sectors,” Timothy Fiore, the chair of the ISM, said in a statement.
He continued: “Comments from the panel were negative regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility. The PMI returned to contraction territory, and with a negative trajectory.”
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Still, the report was not as bad as economists expected: The consensus estimate was that the ISM’s factory index would decline to 44.5, according to Bloomberg data. A 7.7-point jump to 65 in the supplier deliveries index in March limited the overall decline in PMI.
The high reading was mostly due to coronavirus-related supply-chain problems, according to the report. Of the 18 manufacturing industries tracked in the report, 10 showed growth in March.
Production also fell to 47.7 in March from 50.3 in February. In addition, the ISM prices index fell 8.5 points, to 37.4, in March, weighed down partly by falling oil prices as a result of a price war between Saudi Arabia and Russia.
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