US ISM Manufacturing PMI edged up from 52.4 to 52.7 in March, beating expectations of 52.3 and signaling continued expansion in factory activity. The data suggests the sector remains resilient, with the headline reading consistent with an annualized GDP growth pace of around 1.8%.
However, the details highlight growing imbalances. Production strengthened from 53.5 to 55.1, but new orders slowed from 55.8 to 53.5, pointing to a loss of forward momentum. At the same time, employment remained in contraction territory, slipping slightly from 48.8 to 48.7, suggesting firms are still cautious about hiring despite ongoing output gains.
The most notable shift came from prices, which surged from 70.5 to 78.3, the highest level since June 2022. The sharp rise reflects intensifying cost pressures, with survey respondents citing tariffs and the Middle East war as key drivers. With 64% of comments negative, the data points to a manufacturing sector that is still expanding, but increasingly constrained by rising costs and weakening demand conditions.
