US factory activity slowed in March amid a decline in new orders, but the manufacturing sector remains supported by strong domestic and global economies, a trade group reported Monday. The Institute for Supply Management (ISM) said its manufacturing-activity index dropped to 59.3 last month from 60.8 in February, which had been the highest since 2004. A reading above 50 in the ISM index reflects growth in manufacturing, which accounts for about 12 percent of the U.S. economy. Underlying manufacturing figures remained positive, but the sub-categories of new orders, production, and employment each fell in March. Seventeen industries reported growth last month, including fabricated metal products, computer and electronic products, machinery, and chemical products. Apparel and leather was the only industry reporting contraction. Several manufacturers reported that "new tariffs are causing concern across the supply chain. Full impact will take a few weeks to reveal itself." President Donald Trump last month imposed tariffs on steel and aluminum imports to protect domestic metal producers from what he called unfair competition from other countries. Some companies purchased steel and aluminum before the tariffs were implemented, driving up costs, the ISM said.
