Manufacturing activity in the United States contracted more in March than analysts had expected, marking the fifth consecutive month of contraction, as producers moved to keep up with slowing demand, according to new data released Monday.
This contraction, recorded by the Institute for Supply Management, will provide some relief to the Federal Reserve, which has raised interest rates nine times in the past 13 months in an attempt to reduce demand and curb rising inflation.
The March data "reflects companies continuing to slow production to better match demand in the first half of 2023 and to prepare for growth in the late summer/early fall," said Timothy Fiore , lead author of the survey for the Institute for Supply Management.
He added in a statement that the activity of the manufacturing sector fell to 43.6 percent last month, down by 1.4 percentage points from 47.7 percent in February.
That number is more than one percentage point below the numbers expected by analysts polled by Briefing.com.
A ratio of less than 50% indicates that manufacturing sector activity is contracting in general.
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US manufacturing activity contracted more than expected