Amid the fog of war and fading 'hard' data, the final March S&P Global Manufacturing PMI printed 52.3 (a small drop from the flash 52.4 print), higher than the 51.8 print for February.

“Faster growth of output in March points to encouraging resilience for US manufacturing in the face of the outbreak of war in the Middle East," according to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

The ISM Manufacturing PMI also rose from 52.4 to 52.7 - the highest since August 2022...

Source: Bloomberg

Under the hood, Prices Paid continued to rise dramatically while New Orders and Employment dipped...

Business confidence regarding output in the year ahead has also so far held up well, if one follows the S&P Global report.

"This sustained resilience in part reflects reduced concerns over government policies such as tariffs, but also indicates that producers anticipate only a short-term and modest impact from the war, which is clearly uncertain.

It remains early days in terms of the impact of the conflict, and a sharp rise in prices and delivery delays has cast a cloud over the outlook, threatening to drive inflation higher, dampen demand and throttle supply chains, warns S&P Global's Williamson.

Factory input costs have already jumped higher on the back of surging oil prices and supplier delays have become more widespread than at any time since October 2022, linked to the war exacerbating existing shipping, haulage and port delays.

“Some manufacturers are hence reporting stock building as a precaution against future price rises or supply shortages, and hiring has almost stalled in order to reduce staffing costs, underscoring the growing concern about how the war might cause problems for factories in the coming weeks."

Obviously, if price pressures and supply delays persist, demand, employment and production capabilities will inevitably start to be more seriously affected.