US ISM PMI increased to 64.7 in March 2021.

The prices had maintained at an elevated level of 85.6 because of the high freight costs and container shortages.  This also impacted the supplier’s deliveries by +4.6 to 76.6 as a higher number indicated slower deliveries.  It seemed that the high freight costs were deterring manufacturers from ordering raw materials.

However, the producers continued to ramp up their production (68.1, +4.9) further which propelled an increase in inventories (50.8, +1.1) and an increase in employment (59.6, +5.2) to prepare for a rebound in the customers’ inventories (29.9, -2.6) which had to be repleted.  The increase in new order (68, +3.2) was due to higher new local orders boosted by stimulus cheques.

All these resulted in the PMI increasing to 64.7 (+3.9).  This means that the US economy will still continue to improve due to new stimulus cheques.