US Markit Manufacturing PMI Revised Slightly Down

The final Markit Manufacturing PMI for the United States came in at 51.3 in June of 2016, slightly below a preliminary reading of 51.4 but above 50.7 in May. Yet, it is still the highest reading in three months. Production increased and new business grew the most since March while payroll numbers expanded moderately and stocks of purchases fell further.

June data signalled a marginal expansion of manufacturing output, following the decline recorded during the previous month. Greater production volumes reflected a sustained upturn in new business intakes. Although still weaker than the longrun survey average, the latest rise in new orders was the fastest since March. Reports from survey respondents suggested that heightened economic uncertainty and delayed decision making ahead of the presidential election had acted as a brake on client demand.

A rebound in export sales provided a boost to manufacturers’ workloads in June. Moreover, the increase in new orders from abroad was the fastest since September 2014. This contributed to an upturn in backlogs of work across the manufacturing sector for the first time since the start of 2016.

Employment growth picked up further from the near three-year low recorded in April. However, the latest upturn in payroll numbers was still weaker than its post-crisis trend, which some firms linked to uncertainty regarding the business outlook. Manufacturers were also cautious in terms of the inventory management, with stocks of purchases falling at the fastest pace since January 2014. Moreover, post-production inventories declined for the fourth time in the past five months.

Supply chain pressures persisted in June, with the latest survey pointing to the greatest lengthening of lead-times since September 2015. Worsening supplier performance was attributed to capacity pressures and low stocks among suppliers. Meanwhile, input prices increased for the third month running in June. This contributed to a marginal rise in factory gate charges, with the rate of inflation edging up to its fastest since January.

US Markit Manufacturing PMI Revised Slightly Down

Markit | Joana Taborda |
7/1/2016 2:54:35 PM