US ISM MPI decreased to 57.1 in March 2022.

The prices subindex had increased significantly to 87.1 (+11.5) because of imported high inflation (eg, EU-are inflation) and rising employment costs.  In view of the rising inflation caused by the Ukraine war, the producers increased their inventories to 55.5 (+1.9) by purchasing more local raw material (Est’d +5.5) and reducing imports (51.8, -3.6).

The supplier’s deliveries eased to 65.4 (-0.7) which meant faster deliveries because of lesser imports.  The producers still had difficulties finding workers because of a huge job mismatch between job demand and supply but they still managed to increase their employment to 56.3 (+3.4).  Subsequently, the producers would continue to try to increase their workers in the future as shown by the table below (%Higher & %Same increased but %Lower decreased in March).

The producers reduced their production (54.5, -4) because of declines in new orders (53.8, -7.9), new export orders (53.2, -3.9) and new local orders (Est’d -4).  Consequently, the declines in the orders caused customers’ inventories to rise to 34.1 (+2.3) and the backlog of order to decrease to 60 (-5) since there were lesser unfilled orders.

Therefore, all these factors caused the PMI to decrease to 57.1 (-1.5) in March 2022.  The front-loading orders phenomenon which was caused by the skyrocketing inflation seemed to be over as the consumers had cut back on their spending.  Overall, the US PMI is expected to have a downward trajectory in 2022 because of decreasing new orders.