Economic activity in the manufacturing sector expanded in March, according to the findings of the most recent Institute for Supply Management’s Manufacturing PMI report. The U.S. Manufacturing Purchasing Managers’ Index registered 52.7% — the third straight month of expansion (a reading above 50% indicates growth in the manufacturing sector). March’s report was above market expectations of 52.3% and represents a 0.3 percentage point increase from 52.4% recorded in February. New orders continue to expand with a reading of 53.5%, which was a decrease from last month by 2.3 pp. The price index registered 78.3% in March, an increase of 7.8 pp from last month. However, the employment index remains under pressure for 30 consecutive months, edging down 0.1 pp from last month to 48.7%.
The ABA Office of the Chief Economist believes the manufacturing sector remained on solid footing in the first quarter of 2026. Continued expansion may result in an increase in borrowing as firms look to boost production output resulting in stronger commercial and industrial loan demand for banks. However, these numbers likely do not fully reflect the ongoing current geopolitical concerns.
