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Thursday, March 28, 2024

Markit Manufacturing PMI: Further Improvement, But Softer Than July

Courtesy of Doug Short’s Advisor Perspectives.

The preliminary August US Manufacturing Purchasing Managers’ Index conducted by Markit came in at 52.1, down from the 52.9 July final. Today’s headline number came in below the Investing.com consensus of 52.7. Markit’s Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.

Here is the opening from the latest press release:

U.S. goods producers saw a further upturn in overall business conditions during August, though the rate of improvement was softer than seen in July. While output continued to rise markedly, total new work rose at a slower pace and employment expanded at the weakest rate in four months. Meanwhile, companies reported near-stagnant price trends overall, with input prices rising only marginally and companies leaving their prices charged unchanged from the previous month. [Press Release]

Here is a snapshot of the series since mid-2012.

Markit Manufacturing PMI

Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here).

Markit and ISM Manufacturing PMI

The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.

Markit and ISM Manufacturing PMI

The two moving-average series began diverging in early 2015. The ISM index dipped into contraction in the third quarter of 2015 but then reversed directions in 2016 to its current level of modest expansion. The Markit series has trended more steady downward from its interim high early in the second half of 2014. We may be seeing a bit on an uptick in the Markit series from its interim low in May.

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