ISM manufacturing fell from 58.6 in February to 57.1 in March. There was a sharp increase in the price sub-index to 87.1 from 75.6 in February, which was larger than the expected reading of 80. The employment index rose to 56.3 from 52.9 in February, in line with the recently released strong official labor market data, while the new orders index fell sharply to 53.8 from 61.7 in February.
The trend in the ISM data is also significant as it reflects insights into business conditions during the Ukraine war and China’s recent lockdowns. Inflation pressures and growth risks are both heightened by heightened geopolitical uncertainty, rising energy prices, persistent supply constraints and escalating concerns about a hawkish Fed. High prices, large orders and new supply chain challenges are challenging for factories. The risks from Covid restrictions will likely be less. Measured globally, COVID-19 containment measures were the least restrictive in March since the pandemic began. Further planned relaxation of these restrictions will help boost growth in the months ahead.
However, the Russian invasion of Ukraine means trade cuts and a new shock to confidence, as well as new pipeline shortages for food, metals and some industrial gases. Companies will assess current concerns about the impact of the war on rising prices, supply chains, and reduced fiscal and monetary stimulus. Future prospects, suppliers’ delivery times and price indicators will be the key to shedding light on the negative consequences of the war.
Kaynak
Hibya Haber Ajansı