TOP PERFORMING INDUSTRIES

The 10 industries reporting growth in March — listed in order — are: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Wood Products; Transportation Equipment; Plastics & Rubber Products; Chemical Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; and Textile Mills.

WHAT RESPONDENTS ARE SAYING ...

""""""""Slowdown evident, could be based on inventory in the channel."""""""" (Computer & Electronic Products)
""""""""Industry preparing customers for price increases related to corn/grain cost increases."""""""" (Food, Beverage & Tobacco Products)
""""""""Raw material cost soared due to the largest one-month price increase for ferrous scrap since September of 2005."""""""" (Primary Metals)
""""""""General business conditions show significant signs of slowing in the manufacturing sector."""""""" (Transportation Equipment)
""""""""Business is slowing, but we are slightly ahead of last year''s sales. We are projecting a flat year in sales for 2007."""""""" (Furniture & Related Products)

MARCH 2007 MANUFACTURING INDEX SUMMARIES
PMI

The manufacturing economy continued to grow in March as the PMI registered 50.9 percent, a decrease of 1.4 percentage points when compared to February''s seasonally adjusted reading of 52.3 percent. 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 41.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates that both the overall economy and the manufacturing sector are growing. """"""""The past relationship between the PMI and the overall economy indicates that the PMI average for January through March (50.8 percent) corresponds to a 2.8 percent increase in real gross domestic product (GDP) annually. In addition, if the PMI for March (50.9) is annualized, it also corresponds to a 2.8 percent increase in real GDP annually.""""""""

New Orders

ISM''s New Orders Index registered 51.6 percent in March. The index is 3.3 percentage points lower than the seasonally adjusted 54.9 percent reported in February. A New Orders Index above 49.1 percent, over time, is generally consistent with an increase in the Census Bureau''s series on manufacturing orders (in constant 2000 dollars). Eleven industries reported increases during March: Apparel, Leather & Allied Products; Wood Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Transportation Equipment; Food, Beverage & Tobacco Products; Paper Products; Fabricated Metal Products; Chemical Products; Primary Metals; and Furniture & Related Products.

Production

ISM''s Production Index registered 53 percent in March, 1.1 percentage points lower than the seasonally adjusted 54.1 percent reported in February. March is the second consecutive month of production growth for manufacturers. An index above 49.8 percent, over time, is generally consistent with an increase in the Federal Reserve Board''s Industrial Production figures. Of the industries reporting in March, 11 registered growth: Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Wood Products; Textile Mills; Plastics & Rubber Products; Nonmetallic Mineral Products; Chemical Products; Transportation Equipment; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Machinery.

Employment

ISM''s Employment Index registered 48.7 percent in March, a decrease of 2.4 percentage points when compared to February''s seasonally adjusted reading of 51.1 percent. The Employment Index has failed to grow in four of the last five months. An Employment Index above 49.2 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. The four industries reporting growth in employment during March are: Apparel, Leather & Allied Products; Transportation Equipment; Chemical Products; and Miscellaneous Manufacturing.

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower for the 45th consecutive month in March. ISM''s Supplier Deliveries Index registered 51.3 percent in March, an increase of 0.5 percentage point when compared to February''s seasonally adjusted reading of 50.8 percent. A reading above 50 percent indicates slower deliveries. The five industries reporting slower supplier deliveries in March are: Nonmetallic Mineral Products; Computer & Electronic Products; Transportation Equipment; Chemical Products; and Fabricated Metal Products.

Inventories

Manufacturers'' inventories contracted for the eighth consecutive month in March as ISM''s Inventories Index registered 47.5 percent, a 2.9 percentage point increase when compared to February''s reading of 44.6 percent (seasonally adjusted). An Inventories Index greater than 42.4 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis'' (BEA) figures on overall manufacturing inventories (in chained 2000 dollars). The six industries reporting higher inventories in March are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Fabricated Metal Products; Primary Metals; Transportation Equipment; and Chemical Products.

Customers'' Inventories

The ISM Customers'' Inventories Index registered 48 percent in March, 5 percentage points lower than the 53 percent reported in February. The index indicates that respondents believe their customers have less than sufficient inventories on hand (inventories are too low) at this time. This is the first month of decline in this index following five consecutive months in which the index registered above 50 percent. Three industries reported higher customers'' inventories during March: Furniture & Related Products; Computer & Electronic Products; and Fabricated Metal Products.

Prices