US Manufacturing PMI Revised Slightly Lower

The IHS/Markit US Manufacturing PMI was revised slightly lower to 52.4 in March of 2019 from a preliminary of 52.5 and 53 in February. The reading pointed to the slowest growth in factory activity since June of 2017, amid softer increases in output and new orders. Yet, Q1 average was the lowest since Q3 2017.

A key factor behind the lower headline figure was a slower rise in output. The rate of expansion eased to a marginal pace that was the weakest since June 2016 and below the series trend. Panellists stated that the slower increase in production was due to softer underlying client demand.

Similarly, new business growth eased in March. Total new orders expanded at a modest pace that was the slowest since June 2017. At the same time, new export orders rose at only a marginal rate that was the weakest for five months, with firms noting that global trade tensions and the ongoing impact of tariffs had dampened foreign client demand.

In line with less marked growth in new orders, panellists registered the softest rise in input purchasing since June 2016. Where an increase was reported, companies often linked this to the replenishment of stocks. Meanwhile, both pre- and post-production inventories rose in March.

On the price front, input price inflation softened further to the slowest since August 2017. Where a rise in costs was reported, goods producers linked this to higher raw material prices, stemming from the ongoing impact of tariffs and greater demand for inputs. The increase was partly passed on to clients through higher output charges. The rise in factory gate prices was nevertheless the slowest since December 2017.

Backlogs of work were broadly unchanged in March, albeit with the index dipping very marginally below the 50.0 no change mark for the first time since July 2017. Nonetheless, employment rose at a solid rate. A number of firms stated that there were further vacancies to fill, but that they were having difficulties finding skilled or suitable candidates.

Business confidence among manufacturers remained below the series trend but picked up from February. The solid degree of optimism was attributed to new product development and efforts to increase productivity.

US Manufacturing PMI Revised Slightly Lower

Markit | Joana Taborda |
4/1/2019 1:53:03 PM