U.S. manufacturing sector records strong growth in March

U.S. manufacturing saw the strongest growth in three years in March. The seasonally adjusted IHS Markit final U.S. manufacturing PMI rose to 55.6 in March from February’s 55.3. The latest PMI showed the strongest rebound in manufacturing business conditions since March 2015.

The average PMI reading in the initial three months of 2018 showed the best quarterly performance since the third quarter of 2014. Output levels at manufacturing companies continued to expand strongly in March. Although the pace of growth weakened to a four-month low, the rate of growth continued to be comfortably above the long-run series average.

In a reflection of more favorable demand conditions, new orders received by manufacturers grew sharply, in spite of growth falling to a three-month low. Anecdotal evidence commonly linked the upturn to the acquisition of new clients. Moreover, new export orders continued to rise, extending the current sequence of growth to eight months.

On the price front, cost burdens faced by goods producers rose sharply in March. Markedly, the pace of inflation accelerated to the most rapid since November 2012, with firms stating that price rises often stemmed from recently announced tariffs and higher raw material costs. Average prices charged also continued to rise, with the pace of inflation accelerating to the fastest since December 2013.

Stronger demand conditions drove the strong growth in buying activity since September 2014, though companies also increased attempts to stockpile inputs. Consequently, companies hinted at greater pressure on supply chains, with delivery times lengthening to the greatest degree since February 2014. Consistent with sustained growth in new orders, employment rose further in March. The pace of job creation continued to be solid, although falling to a four-month low. Finally, expectations towards the year-ahead outlook for production among manufacturing firms were the most positive for just more than three-years.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bullish at 90.4909. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest