The Institute of Supply Management's (ISM) latest report shows that the manufacturing economy fell at the end of the first quarter following four months of consecutive growth. In fact, this survey of purchasing managers fell in March to 46.2 from February's 50.5. An index reading above 50 indicates an expansion while an index reading below 50 generally shows contraction. Further-more, the survey's sub-index, which has important leading factors, fell 6.1 points in March, putting it at 46.2 compared to 52.3 in February. This decline is the first after six consecutive months of growth in the sub-index.

Output of the nation's factories, mines, and utilities rose by a slight 0.1% in February. While the gain was modest, February is the second consecutive month that industrial output increased following a decline of 0.6% in December of 2002. Overall output is now 1.7% ahead of where it was one year ago. In other words, industrial output continues to recover at a measured pace. While future upticks are expected, the pace of recovery is not expected to improve at a significantly accelerated rate until the economy works through the current uncertainties both home and abroad.

The Conference Board's Consumer Confidence Index (CCI) continued to decline in March. With a reading of 62.5, the CCI for March was the lowest it has been since October 1993 when it slumped to 60.5. The March decline of 2 points comes on the heels of a 14-point drop in February, and is the fourth consecutive month the index has declined. Overall consumer confidence is down 21% since January 2003. The struggling economy, unemployment rate and anticipation of war were commonly cited for the decline. Fortunately, the index rebounded at the conclusion of the first Gulf War.

The Conference Board's summary of leading economic indicators (LEI) fell in February for the first time since September 2002. Six of the ten indicators that make up the leading index decreased. The then looming war with Iraq and severe weather during the month were commonly credited with causing the decline of 0.4%. The indicators hit the hardest were stock prices, consumer expectations and the labor market. While the economy may not recover as quickly as many would hope, the quick resolution to the war with Iraq may help the decline to subside.