- March final manufacturing was 50.3
- Flash manufacturing estimate was 49.8
- Confidence in the outlook for business activity softened
- Employment was unchanged in March, following a four-
month run of growth - Full report
Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence
“The strong start to the year for US manufacturers has faltered
in March. A combination of improved optimism surrounding
the new administration and the need to front-run tariffs had
buoyed the goods-producing sector in the first two months of
the year, but cracks are now starting to appear. Production fell
for the first time in three months in March, and order books are
becoming increasingly depleted.
“While business confidence about the outlook remains
relatively elevated by standards seen over the past three
years, this is based on companies hoping that the near-
term disruption caused by tariffs and other policies will be
superseded as longer-term benefits from the policies of the
new administration accrue. However, March has seen more
producers question this belief. Business optimism about the
year ahead has deteriorated further from January’s near three-
year high, and has dropped sharply over the past two months,
causing firms to stop raising payroll counts for the first time
since October.
“A key concern among manufacturers is the degree to which
heightened uncertainty resulting from government policy
changes, notably in relation to tariffs, causes customers to
cancel or delay spending, and the extent to which costs are
rising and supply chains deteriorating in this environment.
Tariffs were the most cited cause of factory input costs
rising in March, and at a rate not seen since mid-2022 during
the pandemic-related supply shock. Supply chains are also
suffering to a degree not seen since October 2022 as delivery
delays become more widespread.
“Data in the coming months will provide important insights into
how the inflationary aspects of policies such as tariffs balance
out against any benefits to US producers.”
This is a tad better than the flash reading but barely into positive territory.
This article was written by Adam Button at www.forexlive.com.