US March Manufacturing Output Falls to Its Lowest in Nearly Three Years

Manufacturing output in the U.S. dropped to its lowest level in nearly three years in March, data showed on Monday, as new orders continued to fall, and tightening lending conditions could lower activity further.

On Monday, the Institute for Supply Management (ISM) reported that its manufacturing PMI dropped to 46.3 in March from February’s 47.7, the lowest rating since May 2020. Reuters’ poll of economists expected the indicator to fall to 47.5.

Manufacturing activity has decreased for the fifth month in a row, as the PMI stayed below the critical 50 mark. Nonetheless, concrete figures indicate that manufacturing, which accounts for 11.3% of the economy, is still growing steadily.

The government said last week that manufacturing grew at an annualized pace of 4.5% in the fourth quarter. Both manufacturing output and orders for capital goods outside of aircraft showed slight increases in February, according to reports released last month.