Oil prices taking effect as manufacturing sector continues expansion

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According to the most recently published Manufacturing ISM Report on Business, manufacturing sector economic activity expanded for the 27th consecutive month during March of 2015. The overall economy in the United States grew for the 70th straight month during the same period of time according to the report, which was issued by the Chair of the Institute for Supply Management, Bradley J. Holcomb.

According to Holcomb, the March PMI came in at 51.5 percent, which represented a slight decrease of 1.4 points from the 52.9 percent reading in February of 2015. The New Orders Index came in at 51.8 percent, which itself was a decrease of 0.7 percentage points from the reading of 52.5 that was obtained in February.

The Production Index, on the other hand, came in at 53.8 percent, which was a slight 0.1 percent increase over the 53.7 percent reading that was obtained in February. Out of the eighteen different industries operating within the manufacturing sector, a full ten of them reported growth during the period ending in March. These industries include wood products, paper products, transportation equipment, nonmetallic mineral products, fabricated metal products, chemical products, beverage and tobacco products, computer and electronic products and more.

The seven industries that reported some type of contraction during March were leather and allied products, petroleum and coal products, textile mills, miscellaneous manufacturing and more.

When asked about the current financial and operational environments that they are experiencing, respondents had a lot to say about economic activity in the manufacturing industry. Food, Beverage and Tobacco Products respondents indicated that the falling cost of energy was helping control costs, while sales were getting a noticeable boost through an increased level of consumer disposable income at the same time.

Transportation Equipment respondents agreed and indicated that business was still extremely strong, especially when compared to previous reporting periods. Fabricated Metal Products respondents indicated that their business was both strong and on projection, though the strength of the United States dollar was representing something of a challenge for their international business.

Consumer and Electronic Products respondents, however, indicated that oil prices were having a major effect on energy markets and, as a result, business was really starting to slow down.







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