American manufacturing output continued on its middle road in March scoring a moderate gain after two weak months while remaining well below the third and fourth quarter averages of last year.
The index of factory activity from the Institute of Supply Management climbed to 53.7 in March from 53.2 in February but was below the 54.0 forecast from the Bloomberg poll of economists.
It was the best score in since January and the 10th positive month in a row since the index registered 50.0 in April and May last year. The recent peak was 57.0 in November. There has not been negative month since July 2009. The index averaged 56.7 in the final three months of 2013, 55.7 in the prior quarter and 53.9 for the entire year.
Reading from the component indices were generally better. Production gained strongly to 55.9 from 48.2 in February, for the best reading in three months. New orders rose to 55.1 in March from 54.5. Export orders reached 55.5 from 53.5 and import orders were one point higher to 54.5. However, employment dropped to 51.1 in March from 52.3, below the 52.8 estimate and the poorest since last June’s 50.0. Customer inventories and prices fell.
A separate purchasing managers' index from the London based firm of Markit Economics showed slightly slower manufacturing activity as it slipped to 55.5 in March from a nearly four year high in February of 57.1.
The releases were separated by 15 minutes in the New York market, 9:45 EDT for Markit and 10:00 EDT for ISM. From just before the Markit release to 10:15 after the ISM statistic, the euro wavered barely 13 points from 1.3803 to 1.3790. By 11:20 EDT the pair had rebounded an unremarkable 23 points to 1.3813. Dollar/yen exhibited a bit of volatility through the releases, opening at 103.44 jut prior, skidding to 103.37 after the ISM issue and bolting to 103.60 by 10:13 am. But it then subsided to a 103.46-103.58 range until the London close.
Activity in the manufacturing sector diminished noticeably in January in both surveys, a drop most economists attributed to the harsh winter weather in two-thirds of the country. It recovered somewhat in February, though the return was much more pronounced in the Markit survey.
New orders in the London index fell to 58.1 in March from 59.6, partially from a decline in export orders according to Markit. Output slipped to 57.5 from 57.8 and employment was positive for the ninth consecutive month.
The statistical method is similar in each survey, reading above 50 indicate expansion, beneath contraction.
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