March ISM Manufacturing Index Highest Since 2004

"Economic activity in the manufacturing sector expanded in March for the eighth consecutive month, and the overall economy grew for the 11th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business (see chart above).

The manufacturing sector grew for the eighth consecutive month during March. The rate of growth as indicated by the PMI is the fastest since July 2004. Both new orders and production rose above 60 percent this month, closing the first quarter with significant momentum going forward. Although the Employment Index decreased 1 percentage point to 55.1 percent from February's reading of 56.1 percent, signs for employment in the sector continue to improve as the index registered a 10 percent month-over-month improvement, indicating that manufacturers are continuing to fill vacancies. The Inventories Index provided a surprise as it indicated growth for the first time following 46 months of liquidation — perhaps signaling manufacturers' willingness to increase inventories based on expected levels of activity."

MP: Add this to the growing list of V-shaped signs of economic recovery, especially in the manufacturing sector. Notice that the recovery of manufacturing activity since mid-2009 is much stronger than the recovery in the period following the 2001 recession, and we're quickly approaching the peak manufacturing activity reached in 2004.