01 April 2013 16:24 [Source: ICIS news]
WASHINGTON (ICIS)--The US manufacturing sector expanded in March for the fourth straight month, a key survey reported on Monday, but the pace of growth has slowed and is approaching the midpoint that signals contraction.
In its monthly survey of manufacturing industries, the Institute for Supply Management (ISM) said that its purchasing managers index (PMI) fell to 51.3% last month, a decline of 2.9 percentage points from the February reading of 54.2%.
The PMI is a composite of supplier responses to the ISM’s monthly survey of 10 different business performance measures in 18 major manufacturing sectors.
A PMI reading above 50% indicates the ?xml:namespace>
In November last year, the index slipped just under that critical midpoint, falling to 49.9%.
But since then, the PMI had been climbing, from 50.2% in December, to 53.1% in January and up to 54.2% in February before easing down to 51.3% last month.
Among the 10 performance measures, the institute said that while new orders, production, prices and order backlogs all remained in growth territory above 50%, each category was slowing last month.
New orders lost 6.4 percentage points and production dropped by 5.4 points.
Prices and order backlogs both eased in March, dropping 7 and 4 percentage points respectively.
Of the 18 manufacturing industries tracked by ISM, 14 reported growth in March. Among the sectors reporting contraction was chemical products.
An unidentified survey respondent in the chemicals industry was quoted as saying that “Sales are low, even adjusted for seasonal variation”.
Economists will be watching for the April PMI to see if last month’s slowing of the index was a one-time event or the beginning of a downturn.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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