Manufacturing contracted for the second consecutive month in March, driven by growing concerns over tariffs, according to the latest Manufacturing ISM Report On Business.
The Manufacturing PMI fell to 49% in March, a 1.3 percentage point drop from February and its lowest level in four months.
- This marks the second straight month of contraction following a brief two-month expansion, which itself came after 26 months of continuous contraction.
The New Orders Index also declined for the second consecutive month, hitting 45.2%—down 3.4 percentage points from February and the lowest since August 2024.
Prices surged for the fourth straight month, registering 69.4%, a significant 7-percentage-point increase from February, marking the highest level since June 2022.
What They’re Saying: Joe Weisenthal of Bloomberg noted this was the wort reports in a long time, “One of the ugliest, most stagflationary ISM-manufacturing reports we’ve seen in a long time…Virtually all the comments are complaining about tariffs, and the only categories that are going up are prices and inventories.”
Bottom Line: Tariffs continue to drive uncertainty and cost pressures across supply chains, prompting manufacturers to pull back on new orders and investments.
