The arms industry may be doing just fine – but US manufacturing overall declined in March for the first time in five months, reports America’s Institute of Supply Management.
The ISM manufacturing index dropped 4.3 points last month, sliding from 50.5 in February to 46.2, attributable the Institute believes, to retrenchment caused by the war on Iraq. This level of decline surprised analysts who had predicted a far smaller fall to 49.0.
However, the ISM believes the figure may reflect uncertainty about the conflict rather than the actuality, especially given that the much-heralded war broke after survey’s cut-off date on or around the 10th of each month – well before the US and British invasion of Iraq.
Other factors are likely to have affected production levels: unseasonably severe weather and a decline in payrolls also contributed to the decline, believes Dan Meckstroth, chief economist at research group Manufacturers Alliance. “Declining production activity in manufacturing means that the overall economy cannot hope to achieve anything better than tread water in the months ahead,” he opined.
“Consumer confidence affects spending on a real short-term basis,” Meckstroth continued, “but for the most part, people spend based on income and the buy ability of their job, and right now, we're just not getting employment growth.”
Data sourced from: New York Times; additional content by WARC staff