March 2011 ISM Reports

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The pace of growth in manufacturing slowed slightly in March, with the Institute for Supply Management’s (ISM) PMI dropping by 0.2 percentage point. "The recent trend of rapid growth in the manufacturing sector continued in March, as the PMI registered above 60 percent for the third consecutive month,” said Norbert Ore, chair of ISM’s Manufacturing Business Survey Committee. "The component indexes of the PMI remain at very positive levels and signal strong sector performance in the first quarter. While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices. Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins."

Wood and Paper Products fell back into their usual patterns in March: Paper Products advanced and Wood Products retreated. The “positive” news for Wood Products (if it can be described as such) is that more categories showed no change than those that changed. About the only negative reading for Paper Products involved higher input prices.
 

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The non-manufacturing sector also grew at a slightly slower pace in March, thanks to a 2.4 percentage point (to 57.3 percent) drop in the non-manufacturing index (now known simply as the “NMI”). All three industries we track shared in that expansion, although the elements of growth in Ag & Forestry were rather scant.

The rate of input price changes diverged between the manufacturing and service sectors. The prices-paid index rose by 3.0 percentage points for manufacturers (i.e., prices rose at a faster pace in March) but non-manufacturers saw a 1.2 percentage point decline (i.e., prices rose more slowly) in their index. Fuel of all kinds and paper were more expensive. No relevant commodity was down in price, neither was any relevant commodity described as in short supply.