Market Data
April 2, 2026
Steady growth in manufacturing activity continued in March: ISM
Written by Kristen DiLandro
US manufacturing activity grew for the third straight month in March, according to the latest report from the Institute for Supply Management (ISM). March marked the 17th month of overall economic expansion.
The March Manufacturing PMI (Purchasing Managers Index) registered at 52.7%, up 0.3 percentage points compared to February’s reading of 52.4%.
Readings above 50% generally point to economic growth in the manufacturing sector. And readings below 50% suggest a decrease in economic activity.
“In March, US manufacturing activity remained in expansion territory, growing at a slightly faster pace than the month before. Of the five subindexes that make up the PMI, the New Orders Index indicated slower growth compared to the previous month, the Production Index grew at a faster rate, and the Employment and Inventories indexes remained in contraction,” noted Susan Spence, chair of the ISM Manufacturing Business Survey Committee.
New concerns regarding the impact of the war in Iran surfaced in the latest report.
“This month also marks the first report with panelists citing the Iran war as a new impact to their business, along with ongoing uncertainty with US economic policy, despite the recent Supreme Court ruling striking down International Emergency Economic Powers Act (IEEPA) tariffs,” Spence commented.
She added, “64% of comments overall were negative. Among the negative comments, about 20% cited tariffs and about 40% the war in the Middle East.”
New orders and backlog of orders indices showed expansion, while the new export orders index returned to contraction. The production index expanded for the fifth month in a row. Supplier deliveries, inventories, prices, and imports all had mixed results. Employers reported managing headcount rather than making new hires.
The prices index soared to 78.3%, from 70.5% in February. And the imports index dropped 2.3 percentage points to 52.6%, compared to 54.9% in February.
“We’re seeing steady increases in activity, but geopolitical issues and the Iran war are already waning sentiment,” stated a respondent from the fabricated metals products sector.
A survey respondent from the transportation manufacturing sector said navigating the ongoing market uncertainty remained challenging.
“Changes in the tariff structure are bringing cautious opportunities to offset significant costs for the balance of 2026. The actions in Iran, however, add a new wrinkle to energy costs throughout the world, including India. We continue to try and plan for the unpredictable and unexpected,” said the transportation equipment respondent.
