NAM Reports Expanded Manufacturing Activity In March According to the National Association of Manufacturers (NAM), March brought a modest but notable shift in the manufacturing labor picture, as improving activity levels began to translate into hiring, at least incrementally. Manufacturing employment increased by 15,000 in March, reversing a 6,000-job decline in February. The broader labor market also came in stronger than expect- ed, with nonfarm payrolls rising by 178,000. Gains were led by health care, construction, and leisure and hospital- ity, each recovering losses from the prior month. The un- employment rate edged down to 4.3 percent, while labor force participation ticked slightly lower to 61.9 percent. Even with the stronger March data, the longer-term trend remains relatively subdued. Over the past 12 months, manufacturing employment gains have averaged just 22,000 per month, reflecting a labor market that continues to hold steady but has yet to show sustained momentum. Still, three consecutive months of expanding manufactur- ing activity appear to be providing some support, with em- ployment moving modestly higher since late 2025. That underlying activity continued to firm in March. The ISM Manufacturing PMI expanded for the third straight month, rising to 52.7 percent from 52.4 percent in Febru- ary. Both New Orders and Backlog of Orders remained in
expansion territory, signaling continued demand, though New Export Orders slipped back into contraction. At the same time, pricing pressures intensified. After a sharp in- crease in February, the Prices Index climbed another 7.8 percentage points to 78.3 percent, reaching its highest level since June 2022, when inflation was at its peak of nearly 9 percent. Several survey respondents pointed to ongoing con- flict in the Middle East as a contributing factor, particularly through its impact on energy and input costs. Those pres- sures are beginning to work their way through the system, raising concerns about how sustained cost increases may affect both production and end-market demand in the months ahead. Labor demand data reflects a similar mix of stability and caution. Manufacturing job openings fell by 71,000 in Feb- ruary to 439,000, bringing the rate down to 3.4 percent from 3.9 percent in January. While still slightly above last year’s level, the decline suggests that the January uptick was short-lived. Hiring and separations both held steady at 2.3 percent, indicating limited movement in overall workforce turnover. The hiring rate, in particular, remains near a 10-year low, underscoring the hesitancy many manufacturers continue to show when it comes to adding labor. While improving activity levels could begin to shift that dynamic, uncertain- ty around costs, demand, and broader economic condi- CONTINUED ON PAGE 60
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