US ISM Manufacturing PMI fell back into contraction at 49.0 in March, missing expectations of 49.9 and down from February’s 50.3.
The decline was led by a sharp drop in new orders, which slumped from 48.6 to 45.2 — their lowest level since May 2023 — and a pullback in production 50.7 to 48.3. Employment also remained under pressure, falling from 47.6 to 44.7, and continuing a trend of contraction seen in 28 of the past 35 months.
While overall activity softened, price pressures surged. The Prices Index jumped from 62.4 to 69.4, its highest reading since June 2022. Over the past six months, the index has climbed by more than 21 percentage points, signaling mounting cost pressures that could feed into broader inflation in the months ahead — especially in the context of tariff-related supply chain disruptions.
Despite the decline in PMI, ISM noted that the current level still aligns with a modest annualized GDP growth rate of 1.9%.
