The Purchasing Managers Index demonstrates the direction in which the manufacturing industry’s economy is moving. The PMI compares the current state of the manufacturing sector with the prior month. The neutral value is 50 indicates no change, a value less than 50 means that it’s contracting, and a value greater than 50 means that it’s growing. The PMI in March 2022 reached 63.6, a 9.8% increase from the previous month. This is also the highest PMI reported since 2010. Which demonstrates the most progress done in the industry over a one month period since 2010.
Most of the sub-categories that make up the PMI were above the neutral number of 50, which shows expansion throughout most of the sector’s components. The highest increase was New Orders which reached 70, a 40% increase when compared to February 2022. Other increases include production with a 34.8% increase and it now stands at 72; as well as export orders that had a 20% increase and now stands at 60.
Despite most subcategories being over 50, backlog and client inventories were not; backlog stands at 44, and client inventories had a score of 30. Curiously, client inventories increased (31%) in February when compared to January 2022, but decreased (-8.5%) once again in the month of March. Backlog has been decreasing for the past 2 months.
Even though most of the subcategories were reported to be over 50, not all of them increased when compared to the previous month of February, which still demonstrates expansion but not as much as the previous month. These subcategories were own inventories (-10.7%), client inventories (-8.5%), backlog (-12.0%), prices paid (-1.0%), suppliers delivery (-4.4%), and employment (-0.5%).
The PMI is the highest it’s been in over a decade, which demonstrates significant expansion in the manufacturing sector of Puerto Rico. It’s the third month in which the score has been over 50, so the sector’s growth has been consistent in the past months.