Diving deeper into the details, we see an important shift in inventories as companies are stating they are actually building inventories. The below chart details respondents stating they were building, shedding, or maintaining inventory levels.
The U.S. manufacturing sector expanded for an eighth straight month in March, boosted by stronger orders and production, the Institute for Supply Management reported Thursday.
The ISM manufacturing diffusion index rose to 59.6% in March from 56.5% in February, the ISM said. It was the highest reading since July 2004.
Higher numbers indicate more firms are growing.
Economists surveyed by MarketWatch were looking for the index to strengthen to 57.5%. Seventeen of 18 industries were growing in March, the private industry group said.
GDP has seen a recent boost due to the slowing of inventory contraction (details here), but a real build in inventories will have an even larger impact on future GDP figures and hiring.