US ISM manufacturing survey for March 2021:

March ISM manufacturing
  • Highest since 1983
  • Prior was 60.8
  • Prices paid 85.6 vs 83.5 expected (86.0 prior)
  • New orders 68.0 vs 64.8 prior -- highest since 2004
  • Employment 59.6 vs 54.4 prior

This is a great report but maybe not as big of a surprise as it seems. Every regional survey was strong. At the same time, you can't help but cheer record highs. Manufacturing is sizzling.

The market reaction has been modest but this adds some upside risks to tomorrow's non-farm payrolls report.

Comments in the report:

  • "Late-winter storms in unexpected [areas] of the U.S. had our organization exercising business-continuity plans on a much more aggressive scale than anticipated. While the storms slowed our supply chain down, we did what we could to meet orders, even though few were short. We feel that in the coming month, we will be able to make up the misses as well as continue strong deliveries in the next month. As consumer confidence grows and the academia market reopens globally, we do expect orders to increase." (Computer & Electronic Products)
  • "Demand remains strong. Significant supply impacts on raw materials due to the Texas freeze. All major raw-material and suppliers on force majeure." (Chemical Products)
  • "Business conditions are positive for our industry and company. The constraints are mainly related to parts availability (imports, supply chain congestion). Manpower is also a constraint; hiring new members is a challenge." (Transportation Equipment)
  • "Winter Storm Uri has made daily life in supply chain quite a challenge. Everything from plastic substrates to adhesives have been significantly impacted by the production interruptions." (Food, Beverage & Tobacco Products)
  • "The spring and summer months look great for the national oil markets." (Petroleum & Coal Products)
  • "A lack of qualified machine and fabrication shop talent makes it difficult to keep up with production demands when there is no backup (second string). Qualified new hires are an ongoing challenge. We have had to provide better compensation to keep qualified talent. Raw-material prices are up 50 percent to 60 percent over the last six months, which results in increased prices to our customers and a disincentive to build inventory." (Fabricated Metal Products)
  • "Widespread supply chain issues. Suppliers are struggling to manage demand and capacity in the face of chronic logistics and labor issues. No end in sight." (Machinery)
  • "Business is even stronger for us this year through the third quarter, and we expect a very healthy growth of our manufacturing sales." (Electrical Equipment, Appliances & Components)
  • "Business bottomed out in February; we are expecting steady improvement through the end of the year. Inflation and material availability, along with logistics, are major concerns." (Furniture & Related Products)
  • "Tremendous stress on the supply chain since the winter storm in Texas. Chemicals are on allocations or unavailable. Resin is on allocation and unavailable." (Plastics & Rubber Products)