Manufacturing activity in the United States contracted to 49.1 points in March, a sign of the country's economy continuing to struggle amid the viral epidemic. Data released by the Institute for Supply Management (ISM) on Wednesday also showed a slowing down of total orders and employment across the country.
The ISM manufacturing index fell from an expansion of 50.1 points in February to 49.1 last month. Overall activity steeply declines, brought down by a drop in new orders and production. Prices within the manufacturing sector also contracted.
ISM chair Timothy Fiore mentioned in the report that the contraction was mainly due to the economic effects of the coronavirus pandemic, which has shocked global markets. The forced shutdowns, lockdowns, and stay-at-home orders have negatively impacted all manufacturing sectors.
The contraction recorded for March is currently the quickest pace recorded in over 11 years. The slumping demand in the past few months has producers scrambling to offset massive losses.
The ISM' gauge for bookings dropped by 7.6 points to 42.2 points last month, the lowest level recorded since March 2009. The index' employment gauge also dropped to 43.8 points, the lowest recorded since May of last year.
The various metrics reported by the ISM mostly failed to hit analysts' forecast for the month. Average forecasts for the ISM in March predicted a decline of 44.5 points. Certain manufacturers, particularly those producing essential items such as food and medical equipment did see growth during the month but increases in delivery times caused by travel restrictions had reduced their abilities to meet demands.
Market analysts have pointed out that the surge in demand, delays in deliveries, and disruptions in the supply chain have caused chaos that ultimately left a sales vacuum. Businesses that were not equipped to deal with the lack of supply were forced to close down.
Fiore mentioned in a telephone interview with reporters that they have never seen anything move so quickly, referring to the growing number of layoffs and furloughs over the past few weeks. He added that this is just the beginning and the economy has yet to hit the bottom.
According to the latest statistic reports, global coronavirus cases have already surpassed 900,000 confirmed cases. The United States currently has the most cases with over 200,000 confirmed cases. Due to the alarming rates of new cases, the Trump administration has ordered an extension of current social distancing measures and other restrictions to the end of April.
