WASHINGTON (MarketWatch) — A resurgence among American manufacturers that began last fall and picked up after the election of Donald Trump carried on in March, with employment rising to the highest level in six years, according to a survey of executives.
The Institute for Supply Management said its manufacturing index fell slightly to 57.2% last month from 57.7% in February. That was a bit below the 57.8% forecast of economists polled by MarketWatch.
Still, any number above 50% is a sign of good times, and for the second straight month, 17 of the 18 industries tracked by ISM said they are in expansion mode. The last time that happened was almost three years ago.
“After contracting in late 2015 and early 2016, U.S. manufacturing is now expanding,” noted Gus Faucher, deputy chief economist at PNC Financial Services. “The industry is benefitting from continued consumer demand, a turnaround in energy production, and an end to the strengthening of the U.S. dollar.”
Comments from industry executives were largely positive. “Business conditions continue to improve,” said an executive at a company that makes chemicals. “Business is up 10% to 15%,” added an executive at a machinery manufacturer.
Most manufacturers are also adding workers or asking them to work longer, pushing up the employment index to 58.9%. That’s the highest level since the middle of 2011.
Some also said it’s getting harder and harder to find skilled workers. “Finding talent has been challenging,” an executive at a maker of transportation equipment said.
Despite the generally sunny outlook, production did slow down. The production index dropped 5.3 points to 57.6%.
A similar manufacturing survey from IHS Markit, released Monday, also reflected a cutback in production. The Markit index was somewhat more negative, suggesting that the manufacturing index might be losing some steam. The Markit manufacturing PMI fell to a six-month low of 53.3 in March, down from 54.2 in February.
The ISM and IHS indexes are compiled from a survey of executives who order raw materials and other supplies for their companies. The gauge tends to rise or fall in tandem with the health of the economy.