The US production activity slowed down in March with a decline in new orders, but growth in the manufacturing sector remains backed by a strong domestic and global economy. The data show a slight increase in construction costs in February. The figures support economists’ view that economic growth slowed in the first quarter due to seasonal stress.
The data from the Institute for Supply Management (ISM) showed that activity in the sector decreased to 59.3 points last month, compared to 60.8 in February. The values above 50 points are an indicator of expansion, and below them a contraction in production, which accounts for about 12% of the US economy.
Seventeen industries, including manufactured metal products, computer and electronic products, machinery and chemicals, reported growth last month. Apparel, leather and related products are the only industry that reports a decline.
The machine manufacturers said the duties imposed on imports of steel and aluminum cause panic buying, which leads to higher prices. The manufacturers recognize that new duties are causing concern in the supply chain, the full impact of which will become clearer in the coming weeks.