ISM manufacturing index shows biggest drop in orders since 2009
Most manufacturers are suffering, but not all of them. Those that make foodstuffs and safety equipment are holding up better than others. Getty Images
The numbers: American manufacturers began to feel the brunt of the coronavirus pandemic toward the end of March as new orders and employment fell to the lowest level since the end of the 2007-2009 Great Recession, a new survey of executives showed.
The Institute for Supply Management said its manufacturing index slipped to 49.1% last month from 50.1%. Readings under 50% indicate more companies are contracting instead of expanding.
Economists surveyed by MarketWatch had forecast the index to drop to 44%, but the survey was completed before widespread sections of the U.S. economy were shuttered.
The index is all but certain to sink next month, though a few industries are likely to hold up surprisingly well because of an increase in demand for products such as toilet paper, sanitizer and other consumer goods in short supply.
What happened: New orders for manufactured goods slumped in March. The ISM’s new-orders index fell 7.6 points to 42.2% — the lowest level since the end of the 2007-2009 Great Recession.
“COVID-19 has caused a 30% reduction in productivity in our factory,” said an executive at machinery manufacturer.
Production and employment also declined, with employment also sliding to an 11-year low.
The ISM index is compiled from a survey of executives who order raw materials and other supplies for their companies. The gauge tends to rise or fall in tandem with the health of the economy.
Easy Money 