TEMPE, Ariz. – The bad news continues for the U.S. manufacturing sector, which shrunk for the fifth consecutive month in March. Furniture manufacturing also fared poorly, falling for the 11th month in a row.

The Institute for Supply Management’s March report measured the manufacturing sector at 46.3%, 1.4% lower than February. This marks the lowest reading since May 2020. Any reading below 50 indicates a contraction.

“The U.S. manufacturing sector contracted again, with the index declining compared with the previous month,” ISM Chairman Timothy Fiore reported. “With panelists reporting softening new order rates over the previous 10 months, the March reading reflects companies continuing to slow outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period. Demand eased, with new orders contracting at a faster rate, new export orders still below 50% and declining, customers’ inventories entering the high end of a ‘just right’ level – a negative for future production – and orders backlogs sagging again and continuing in contraction.”

“New order rates remain sluggish as panelists become more concerned about when manufacturing growth will resume,” he said. “Supply chains are now ready for growth, as panelists’ comments support reduced lead times for their more important purchases. Price instability remains, but future demand is uncertain as companies continue to work down overdue deliveries and backlogs.”

Of the 18 manufacturing industries recognized by the ISM, just six reported growth. The other 12 reported contraction, with furniture and wood products both among them.

Furniture reported the second-biggest decline in new orders, as well as the fifth-largest in production. Both furniture and wood products reported a contraction in inventory levels, with furniture being one of five industries to say that customers’ inventories are too high.

More positively, furniture and wood products both again reported improvements in supplier delivery speeds. Both again reported a decrease in the price of raw materials. Furniture and wood products reported the two biggest declines in order backlogs.

Both furniture and wood products reported no change in employment levels. In February, furniture reported an increase in employment.

Source: https://www.furnituretoday.com/