US factory activity rebounds in March, ISM data shows
Activity at US factories picked up moderately in March, the results of perhaps the most widely-followed barometre of the sector´s health showed.
The Institute for Supply Management´s manufacturing sector purchasing managers´ index increased from a reading of 49.5 for February to 51.8 for March.
Readings above or below 50.0 are indicative of successively quicker rates of expansion or contraction, respectively.
That was better than the reading of 51.5 which analysts had penciled in.
Robust details
Nevertheless, the details of the report appeared to be far more robust.
A key gauge of new orders jumped from 51.5 to 58.3, while a sub-index tracking the prices manufacturers charge for their goods surged from 38.5 to 51.0.
Recent large gains in the price of oil on international markets were likely behind the rebound in the prices paid component of the report, one analyst said.
Another sub-index, linked to companies´ level of output improved from 52.8 to 55.3.
The only relatively weak spots in the report were the readings on the subindices for employment and inventories, with both continuing to shrink, although the pace of decline in the latter was less in March.
The employment sub-index fell from 48.5 to 48.1 while that for manufacturers´ inventories improved from 45.0 to 47.0.
Analysts surprised, but upbeat
"The problem is that the magnitude of the rebound in US manufacturing sentiment is hard to explain. True, the dollar has depreciated somewhat recently, but currency movements take much longer to feed into actual activity and some of that past appreciation should still continue feeding through.
"Overall, the global evidence of a turnaround in manufacturing in March was perhaps unexpected, but that doesn’t make it any less welcome," Steve Murphy, US economist at Capital Economics said in a research note sent to clients.
