The Institute for Supply Management (ISM) reported that U.S. manufacturing activity expanded in March 2026, ending a five-month period of contraction. The Purchasing Managers' Index (PMI) rose to 50.3, up from 49.5 in February, crossing the 50-point threshold that separates expansion from contraction.
Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, stated the increase was driven by a significant improvement in new orders, which rose to 51.4. Production also increased, reaching 52.5. However, employment in the sector remained in contraction territory at 48.1.
The report noted that demand remains tentative, with input demand easing and supply chains performing well. Of the 18 manufacturing industries tracked, 10 reported growth in March. The Prices Index registered 55.8, indicating an increase in raw materials costs for the third consecutive month.
This return to expansion suggests a potential stabilization in the manufacturing sector, though analysts caution that the outlook remains mixed due to ongoing global economic uncertainties.
