The US manufacturing activity unexpectedly expanded, and the ISM manufacturing index ended its 16 month contraction in March. Although the production and new order index have significantly improved, the employment situation remains sluggish, and the manufacturing industry needs to cope with soaring prices and cost pressures, and further improve employment levels to maintain the expansion trend.

Expansion of manufacturing activity:

• The US manufacturing activity unexpectedly expanded, with the ISM manufacturing index rising to 50.3 in March, a new high since September 2022, ending a 16 month contraction trend. Production rebounded significantly and demand strengthened.

Cost pressures and soaring prices:

• The manufacturing industry is facing rising costs, rising labor and raw material costs, leading to an increase in sales prices for manufacturers, with the price index reaching a new high since July 2022.

Employment dilemma:

• Although manufacturing activities have expanded, the employment situation in the manufacturing industry remains sluggish, and the manufacturing employment index continues to shrink with only a slight improvement.

Production and Orders:

• The production index and new order index have both significantly improved, but the employment index continues to shrink. The manufacturing inventory index has slowed down, but the customer inventory index has accelerated its contraction.

Optimistic outlook:

• The head of procurement and supply management expressed optimism about the outlook for the manufacturing industry, with stable order growth indicating elasticity in consumer demand and corporate investment, but the manufacturing industry is still in the early stages of recovery.