According to the Institute for Supply Management (ISM), activity in the US manufacturing sector continued to expand in March for the seventh consecutive month.
The headline index was in line with expectations at 57.2, though lower than the 57.7 registered in February, which was the highest reading since August 2014.
ISM said that out of the 18 industries surveyed, 17 registered growth while one industry remained unchanged. Furthermore, all 18 industries recorded rises in new orders.
Bradley Holcomb, chair of ISM’s business survey committee, noted that comments from purchasing managers in some industries are facing difficulties to find workers with certain skills.
In the meantime, official figures revealed that inflation across the 19-country eurozone fell more than expected to a three-month low in March, which was partly related to the timing of Easter.
The EU’s statistics agency, Eurostat, said the annual consumer price inflation rate slowed to 1.5 per cent, from February’s four-year high of two per cent, when it exceeded the European Central Bank’s (ECB) target of “below, but close to two per cent”, and is likely to reduce pressures on the central bank to rein back its stimulus efforts soon.
Jack Allen, a European economist at Capital Economics, said inflation is now on a downward trend and expects the ECB will continue with the bond-buying programme and leave interest rates unchanged until well into 2018.
Finally, in Germany, a survey published last week showed that manufacturing growth reached an almost six-year high in March, underpinned by a sharp increase in orders for intermediate goods. This indicates that this sector supported economic expansion in the first quarter.
Markit’s Purchasing Managers’ Index (PMI) for manufacturing increased to 58.3 in March from 56.8 in February, the highest level in 71 months, while the final services index rose from 54.4 in February to 55.6 in March to a 15-month high. Markit’s final composite PMI, which measures activity in manufacturing and services, and accounts for more than two-thirds of the economy, increased from 56.1 in February to 57.1 in March to reach a 70-month high.
This article was compiled by Bank of Valletta for general information purposes only.