NEW YORK – 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.
According to the Labor Department, the number of unemployed people in the manufacturing sector in February rose to 1.8 million — or 11.5 percent of that work force — from 820,000, or 5 percent, at the same time in 2008.
More mass layoffs in the manufacturing sector were announced this week. 3M Co., the maker of Scotch tape, Post-It Notes and other products, said Tuesday it’s cutting another 1,200 jobs, or 1.5 percent of its work force, because of the global economic slump. Fewer than half the jobs will be in the U.S., but include “several hundred” in its home state of Minnesota, a company spokeswoman said.
The 1,200 figure includes cuts made earlier in the first quarter and follow more than 2,400 positions that 3M eliminated worldwide during the fourth quarter.
Rising unemployment nationwide — currently at 8.1 percent — is swamping consumer demand for U.S. goods, while strapped corporations cut capital budgets. Meanwhile, recessions in Europe and plunging growth in Asia are slowing U.S. exports.
Manufacturers still think their customers’ inventories are too high. That index rose for the eighth straight month to 54 in March from 51 in February.