Input shortages due to supplier delays hampered US manufacturing capacity in Q1 2021 causing the US IHS Markit Flash Composite PMI to fall by 0.4 points to 59.1 in March against the previous month.
Still, the month encountered the second-fastest private sector increase since September 2014, with activity in this sector rising largely due to growth in the service side of the business.
March encountered strong business confidence and greater optimism due to the vaccine rollout, stronger demand conditions over the coming year, and additional government stimulus activities. The net effect from additional production of goods decreased unemployment this month with service sector firms recording the quickest increase in staff.
The IHS Markit Flash US Manufacturing Index rose by 0.4 points to 59 this month from 58.6 in February, the second-fastest growth since April 2010. However, The severe supply chain disruption in March, however, was the worst on record since May 2007.
The rate of production growth was the slowest since October 2020 as the US began to recover from the initial COVID-19 restrictions. The upturn in new business in March 2021 saw the sharpest acceleration since June 2014 including strength in new export orders. Firms also passed on greater input prices to consumers with the rate of charge inflations the highest on record.