Data out Tuesday showed activity in the manufacturing sector slipped into contraction and costs continued to surge as suppliers weighed the impact of President Trump’s tariff policy.
The Institute for Supply Management’s manufacturing PMI registered a reading of 49.0 in March, down from February’s 50.3 reading and below the 49.5 economists polled by Bloomberg had expected. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate a contraction.
The prices paid index surged to 69.4, up from 62.4 the month prior and the highest reading since June 2022, reflecting companies’ continuing cost increases. Economists had expected a reading of 64.6.
Meanwhile, another reading on manufacturing activity out Tuesday also raised concerns over Trump’s tariff uncertainties. The final reading of S&P Global’s manufacturing PMI hit 50.2 in March, down from a strong 52.7 in February.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said in the release, “The strong start to the year for US manufacturers has faltered in March.”
S&P said a “key concern” among manufacturers is the degree to which heightened uncertainty resulting from policy changes, notably tariffs, causes customers to cancel or delay spending, along with ripple effects from rising costs and deteriorating supply chains.
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