Activity in the U.S. manufacturing sector continued to expand in the month of March, according to a report released by the Institute for Supply Management on Monday, with the index of activity in the sector rising by slightly more than anticipated.
The ISM said its index of activity in the manufacturing sector climbed to 53.4 in March from 52.4 in February, with a reading above 50 indicating growth in the sector. Economists had expected the index to edge up to a reading of 53.0.
Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee, said, "Comments from the panel remain positive, with several respondents citing increased sales and demand for the next few months."
An acceleration in the pace of production growth contributed to the increase by the headline index, with the production index climbing to 58.3 in March from 55.3 in February.
Employment in the manufacturing sector also increased at a faster rate, according to the ISM, as the employment index rose to 56.1 in March from 53.2 in February.
James Knightley, senior economist at ING, said, "This suggests that hiring is rising at its fastest rate since June last year, and with jobless claims numbers continuing to fall, this bodes well for Friday's labor report."
The backlog of orders index also crept up to 52.5 in March from 52.0 in February, while the inventories index inched up to 50.0 from 49.5.
On the other hand, the new orders index slipped to 54.5 in March from 54.9 in February, indicating a modest slowdown in the pace of new orders growth.
The report also showed that the prices index edged down to 61.0 in March from 61.5 in February, suggesting that prices increased at a slightly slower rate.
Wednesday morning, the ISM is scheduled to release a separate report on activity in the service sector. The index of activity in the service sector is expected to dip to 57.0 in March from 57.3 in February.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.