The US manufacturing sector expanded in March for the first time since September 2022, the Institute for Supply Management reported today.

Its Manufacturing PMI composite index rose to a reading of 50.3% in March, up from February’s reading of 47.8%. Readings above 50% indicate the manufacturing sector is, generally, expanding.

“Business activity is up,” according to a quote included in the ISM’s report from an executive at a wood products manufacturer. “Many manufacturers are anticipating better business in the second quarter and much better in the third quarter. They are reporting that second-quarter bookings are just starting to ramp up.”

Another executive at a transportation equipment manufacturer said they are “expecting to see orders and production pick up for the second quarter. Suppliers are working with us to help drive costs down, which will help improve the margin for the rest of the year and deliver growth in 2025.”

However, the employment index, which makes up part of the overall Manufacturing PMI composite index, showed contraction with a reading of 47.4% in March. It’s the sixth month of contraction for the employment index. The ISM noted companies are continuing to reduce staff through layoffs, attrition and hiring freezes. Still, March’s reading is an improvement from 45.9% in February.

Data in the ISM’s report is based on a survey of purchasing supply executives across the US.