The following is an unedited transcript of the news release from Institute for Supply Management.



(Tempe, Arizona) — Economic activity in the manufacturing sector failed to grow in March for the 14th consecutive month, and the overall economy contracted for the sixth consecutive month, say the nation''s supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. """"The rapid decline in manufacturing appears to have moderated somewhat, as the PMI remains in the mid-30s for a third consecutive month. While the PMI is slightly higher in March, the New Orders Index offers greater encouragement, as it rose above the 40-percent mark for the first time in seven months. The Production Index showed no benefit as yet from the improvement in new orders, as it continued to decline at a rate similar to March. The rate of decline in the Employment Index slowed slightly, and the same held true for the Prices Index. A special question was asked with regard to the Economic Stimulus Package, and five of the 18 manufacturing industries expect to derive some benefit from the stimulus.""""

PERFORMANCE BY INDUSTRY


None of the 18 manufacturing industries reported growth in March. The industries reporting contraction in March — listed in order — are: Fabricated Metal Products; Textile Mills; Machinery; Chemical Products; Primary Metals; Printing & Related Support Activities; Transportation Equipment; Plastics & Rubber Products; Petroleum & Coal Products; Wood Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Furniture & Related Products; Nonmetallic Mineral Products; Paper Products; Miscellaneous Manufacturing; Computer & Electronic Products; and Apparel, Leather & Allied Products.

WHAT RESPONDENTS ARE SAYING ...

""""We remain challenged to align our capacities with demand."""" (Nonmetallic Mineral Products)
""""Most of the international markets have been reducing inventory levels and they are forecasting improvements in the next 4 to 6 months."""" (Chemical Products)
""""Many pockets of improvement."""" (Electrical Equipment, Appliances & Components)
""""Still very slow. No stimulus package for manufacturing. Down 30 percent."""" (Fabricated Metal Products)
""""What we are feeling now is that customers aren''t making their final payments on equipment that has already been shipped."""" (Machinery)
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price

Copper; Polyethylene; and Polypropylene.
Commodities Down in Price

Aluminum (6); Caustic Soda; Corrugated Containers (3); Diesel Fuel; Fuel Oil; Natural Gas (8); Stainless Steel (6); Stainless Steel Products (4); Steel (7); Steel—Sheet; and Steel Products (2).
Commodities in Short Supply

No commodities are reported in short supply.

PMI

Manufacturing contracted in March as the PMI registered 36.3 percent, which is 0.5 percentage point higher than the 35.8 percent reported in February. This is the 14th consecutive month of contraction in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 41.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates contraction in both the overall economy and the manufacturing sector. Ore stated, """"The past relationship between the PMI and the overall economy indicates that the average PMI for January through March (35.9 percent) corresponds to a 1.6 percent decrease in real gross domestic product (GDP). In addition, if the PMI for March (36.3 percent) is annualized, it corresponds to a 1.5 percent decrease in real GDP annually.""""

New Orders

ISM''s New Orders Index registered 41.2 percent in March, 8.1 percentage points higher than the 33.1 percent registered in February. This is the 16th consecutive month of contraction in the New Orders Index. A New Orders Index above 48.8 percent, over time, is generally consistent with an increase in the Census Bureau''s series on manufacturing orders (in constant 2000 dollars).

Six industries reported growth in new orders in March: Plastics & Rubber Products; Nonmetallic Mineral Products; Furniture & Related Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Miscellaneous Manufacturing. The industries failing to grow in March are: Petroleum & Coal Products; Apparel, Leather & Allied Products; Chemical Products; Transportation Equipment; Machinery; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Primary Metals; and Printing & Related Support Activities.

Production