March ISM Report: Manufacturing PMI Reaches Highest Level Since August 2022

The March 2026 ISM (Institute for Supply Management) Manufacturing PMI registered 52.7%, a slight increase over February’s 52.4% and the highest level since August 2022. The month-over-month increase of 0.3 points indicates growth at a faster rate.

“Of the five subindexes that directly factor into the Manufacturing PMI, three (new orders, production and supplier deliveries) were in expansion territory, the same as in February. The employment and inventories indexes stayed in contraction, and both declined compared to February,” says Susan Spence, chair of the ISM’s manufacturing business survey committee. A reading below 50% represents contraction.

The new orders index fell 2.3 points to 53.5%, indicating growth at a slower rate. The production index also remained in expansion, growing 1.6 points to 55.1%. The employment index remained in contraction territory, decreasing 0.1 points to 48.7%.

After registering 59% in January, the prices index has jumped 19.3 points in the last two months for a March reading of 78.3%.

“The prices index reading continues to be driven by (1) increases in steel and aluminum prices that impact the entire value chain, (2) tariffs applied to many imported goods and now (3) increases in petroleum-based products as a result of the recent Middle East conflict,” says Spence.

13 manufacturing industries reported growth in March:

• Printing & related support activities
• Primary metals
• Transportation equipment
• Miscellaneous manufacturing
• Electrical equipment, appliances & components
• Textile mills
• Computer & electronic products
• Fabricated metal products
• Machinery
• Paper products
• Nonmetallic mineral products
• Wood products
• Chemical products

“Of the six largest manufacturing industries, four (transportation equipment; computer & electronic products; machinery; and chemical products) expanded in March,” says Spence.

The conflict in Iran and the Supreme Court IEEPA tariff ruling are frequent themes among respondents in the comments of the survey.

“Current Middle East unrest is already starting to impact business operations by increasing lead times, costs, container delays and the like,” writes a respondent in the food, beverage & tobacco products sector.

Another respondent in the chemical products sector writes, “Ongoing geopolitical instability has emerged as a persistent factor influencing global trade dynamics. We anticipate strategic realignment of supply chains as organizations respond to energy market volatility and shifting trade policies. In light of these macroeconomic headwinds, we — like most organizations — are maintaining a cautious posture regarding investment commitments while continuing to monitor market conditions closely.”