U.S. manufacturers’ business conditions record strong and accelerated recovery in March
Source: FxWire Pro - Commentary / 22 Mar 2018 16:23:14 Eastern Standard Time
U.S. manufacturers saw a strong and accelerated rebound in their overall business conditions in March. This was emphasized by the seasonally adjusted Flash Manufacturing PMI index that rose to 55.7 from February’s 55.3. The latest reading hinted at the strongest upturn in manufacturing operating conditions for three years. Stronger contributions from the employment, inventories and suppliers’ delivery times components aided in lifting the headline PMI in March.
Latest data also points towards strong rises in manufacturing production and new orders, although in both cases the rates of growth eased since February. In the meantime, input buying rose at the most rapid rate since September 2014, which a number of survey respondents attributed to pre-purchasing and stock building ahead of expected raw material price rises.
Attempts to stimulate pre-production inventories also resulted in intense pressure on supply chains. The latest lengthening of lead-times from vendors was the greatest recorded since the snow-related disruptions seen in early-2014. Manufacturers hinted at a steep and accelerated rise in their average cost burdens in March, which was overwhelmingly linked to rising raw material prices. The overall pace of input cost inflation was the most rapid since September 2011.
Several survey respondents cited higher prices for metals and rose charges by suppliers amidst solid demand for raw materials. Meanwhile, factory gate charges rose at the most solid rate for just over six-and-a-half years in March.
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