The ISM Purchasing Managers Index climbed to 64.7%, indicating an overall expansion for the 10th consecutive month. Analysts had expected a breakthrough of just 61.2%.
The manufacturing sector in the United States grew more than expected in March but it is facing a series of negative factors, including a lack of materials and labor, limiting its growth potential, according to the ISM index released on Thursday. .
The purchasing managers index climbed to 64.7% (+ 3.9 percentage point), indicating an overall expansion for the 10th consecutive month, ISM said. And this growth is higher than analysts’ expectations (61.2%).
With the exception of prices, all the components of the index recorded an increase, in particular new orders (+3.2 points to 68%), production (+4.9 points to 68.1%) or even employment (+5.2 points to 59.6%).
“The manufacturing industry continued to recover in March,” summed up Timothy Fiore, responsible for this survey, quoted in the press release.
However, the survey reveals many difficulties for companies to meet the growing demand due to the lack of parts and materials available in the market.
“Extended delivery times, large-scale shortages of essential raw materials, rising raw material prices and product transportation difficulties affect all segments of the manufacturing economy,” the federation said.
Mr. Fiore adds that the sector is increasingly confronted with worker absenteeism due to the Covid, occasional closures due to shortages of parts and difficulties in filling vacant positions.
These elements “limit the growth potential of manufacturing”.
However, optimism is growing, “with eight positive comments for a cautious comment, compared to a ratio of 5 to 1 in February,” said the ISM.
Economists expect a mini economic boom in the spring in the United States which in turn vaccinate the population.
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