U.S. Factory Activity Retreated in March on Tariff ConcernsISM
By Ed Frankl
U.S. manufacturing activity fell back into contraction in March, reflecting renewed concerns about cost pressures and demand in light of the uncertainty surrounding the Trump administration's trade policy.
The Institute for Supply Management said Tuesday that its purchasing managers' index of manufacturing activity fell to 49.0 in March, from 50.3 in February. That was weaker than the 49.5 from a consensus of economists polled by The Wall Street Journal.
That meant activity measured below the 50-mark that divides growth and contraction, after expansions in January and February that themselves followed 26 consecutive months of contraction.
"Demand and production retreated and destaffing continued, as...companies responded to demand confusion," said Timothy R. Fiore, chairman of the ISM Manufacturing Business Survey Committee.
Price growth accelerated due to tariffs, causing backlogs in new-order placements, supplier-delivery slowdown and manufactured-inventory growth, he added.
Inventories growth is a temporary move to avoid tariffs and will decline when such trade issues are resolved, Fiore noted.
"Customers are pulling in orders due to anxiety about continued tariffs and pricing pressures," said one respondent to the survey from the computer and electronic products sector.
The contraction measured by ISM contrasts a little with purchasing managers' index data from S&P Global, also published Tuesday, which showed activity expanding, albeit only marginally.
Write to Ed Frankl at edward.frankl@wsj.com
Corrections & Amplifications
This item was corrected at 10:24 a.m. ET to clarify that the ISM released its purchasing managers' index of manufacturing activity on Tuesday, not on Monday.
(14:38 GMT) Correction to ISM Manufacturing Article
The ISM said Tuesday that its purchasing managers' index of manufacturing activity fell to 49.0 in March. "U.S. Factory Activity Retreated in March on Tariff Concerns — ISM," at 10:32 EDT, incorrectly said the day was Monday.