The Institute for Supply Management (ISM) recently reported a contraction in the US manufacturing sector, providing some relief for the US Federal Reserve, which has been working to reduce demand to tackle high inflation. The March data showed that US manufacturing companies have been slowing output to match demand for the first half of 2023 and prepare for growth in the late summer and early fall.
The ISM manufacturing survey declined to 46.3%, a decrease of 1.4 percentage points from February’s 47.7%. The figure was more than 1 percentage point lower than analysts’ expectations. A reading below 50% indicates that US manufacturing is generally contracting. The New Orders Index saw a sharper contraction, dropping 2.7 percentage points to 44.3%, while the New Export Orders Index remained in contraction territory.
