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Monthly Musings – March 2025

MFW News / March 24, 2025

Month-over-Month: Decreased by 10%
Year-over-Year: Increased by 4.7%
Port Activity: East Coast ports like Savannah and Charleston saw gains of 9.8% and 10.6% respectively, while Long Beach and Los Angeles posted sharp declines of 24.7% and 15.7%.
Country of Origin: Imports from China fell 12.5% month-over-month due to the Lunar New Year and newly imposed 10% U.S. tariffs, though they remained 7.9% higher than February 2024.

Inventory Levels: Increased to 64.8, rising 6.3 points from January as businesses restocked after the holiday season.
Inventory Costs: Surged to 77.3, reflecting the highest reading since late 2022, driven by repositioning inventory closer to consumers.
Warehousing Capacity: Slowed slightly to 54.6 (-2.7), suggesting continued expansion but at a moderating pace.
Warehousing Utilization: Increased to 64.2, indicating strong usage of available space amid growing inventory levels.
Warehousing Prices: Climbed to 70.9, marking one of the highest readings in over a year, reflecting rising demand and limited capacity.
Transportation Utilization: Rose to 63.4, showing heightened use of freight services across modes.
Transportation Prices: Increased to 69.5, accelerating at the fastest pace since mid-2022, likely driven by tight capacity and sustained e-commerce demand.
Transportation Capacity: Slightly expanded to 53.8, offering modest relief but still suggesting a tightening market.

Source | ISM.com

New Orders: Contracted to 48.6% (-6.5)
Production: Grew to 50.7% (-1.8)
Employment: Declined to 47.6% (-2.7)
Supplier Deliveries: Slowed at 54.5% (+3.6)
Inventories: Marginally contracted to 49.9% (+4.0)
Customers’ Inventories: Remained unchanged at 46.7%
Prices Index: Increased to 62.4% (+7.5)
Backlog of Orders: Contracted to 46.8% (+1.9)
New Export Orders: Grew to 51.4% (-1.0)
Imports: Rose to 52.6% (+1.5)

Overall Index: Rose to 115.2, marking a 3.0% month-over-month increase from January’s 111.9.
Key Highlights:
- Year-over-Year Comparison: Increased by 0.9% compared to February 2024, indicating modest annual growth.
- Not Seasonally Adjusted Index: Registered 106.6 in February, which was 4.1% above January’s level, pointing to strong underlying demand.

Month-over-Month: Increased by 0.2% from January’s revised total of $721.3 billion.
Year-over-Year: Rose by 3.1% compared to February 2024, indicating continued consumer spending resilience.
Key Drivers:
- Motor Vehicle and Parts Dealers: Sales increased 6.4% year-over-year, reflecting sustained demand in the automotive sector.
- Retail Trade Sales: Declined 1.2% month-over-month but remained 4.0% higher than February 2024, showing solid year-over-year momentum.
- Food Services and Drinking Places: Rose 5.4% year-over-year, underscoring strength in dining activity despite shifting consumer preferences.

Shipments:
- Month-over-Month: Increased by 10.5%, partially due to normal seasonal trends and recovery from January’s severe weather conditions.
- Year-over-Year: Declined by 5.5%, an improvement from January’s 8.2% decrease, indicating a gradual stabilization in shipment volumes.
Expenditures:
- Month-over-Month: Rose by 3.6%, reflecting higher freight spending as shipment volumes rebounded.
- Year-over-year: Decreased by 4.6%, with the decline widening slightly from January’s 4.2% drop, suggesting ongoing adjustments in freight expenditures.
Inferred Freight Rates:
- Month-over-Month: Decreased by 6.2%, indicating a reduction in the average cost per shipment.
- Year-over-year: Increased by 1.0%, showing modest annual growth in freight rates.