March ISM Index-Manufacturing index shows contraction in March

Manufacturing index contracts for 14th straight month; pace of decline slower than expected

A trade group's measure of the health of the manufacturing sector contracted for the 14th straight month in March, but at a slower pace than expected and a handful of industries expect to benefit from the government's economic stimulus measures.

The Tempe, Ariz.-based Institute for Supply Management said Wednesday its manufacturing index rose to 36.3 last month from 35.8 in February. Economists surveyed by Thomson Reuters expected the index to rise to 36.

A reading below 50 signals contraction. The index hit a 28-year low of 32.9 in December.

The report, based on a poll of the Tempe, Ariz.-based trade group of purchasing executives, covers indicators including new orders, production, employment, inventories, prices, and export and import orders.

The report said declines in new orders and employment persisted, but slowed a bit. Still, none of the 18 manufacturing industries grew in March.

But the report did say that five of the industries surveyed, including electrical equipment, primary metals and machinery -- expect to gain from the government's economic stimulus measures.

"The rapid decline in manufacturing appears to have moderated somewhat," said Norbert Ore, chair of the ISM manufacturing survey committee.

New orders rose to 41.2 -- the first reading above 40 in seven months. Six industries, including computer and electronic products, said orders grew.

But the rising demand for products didn't translate into more jobs. The employment index inched off its record low of 26.1 in February to 28.1 percent in March. None of the 18 industry sectors said their labor forces grew.