US Factory Activity Matches Expectations


The flash Markit US Manufacturing PMI came in at 53 in September of 2015, the same as in August and in line with market forecasts. Yet, manufacturing output growth remained at a 22-month low as new work and employment slowed while prices fell for the first time in three years.

The latest increase in new work was the weakest since January 2014, which manufacturers linked to greater caution among clients and subdued overall business conditions.

New export orders picked up marginally in September, despite widespread reports that the strong dollar had weighed on demand from abroad. Although only slight, the latest rise was the most marked since February. Weaker overall new order growth and heightened uncertainty regarding the global economic outlook encouraged inventory streamlining and more cautious job hiring across the manufacturing sector in September.

The latest increase in payroll numbers was only marginal and the weakest since July 2014. A number of firms commented on the nonreplacement of departing staff and efforts to boost productivity at their plants.
Stocks of finished goods meanwhile decreased for the second month running, and the rate of contraction was the fastest since June 2014. Preproduction inventories rose at the slowest pace for over a year in September, which manufacturers linked to subdued business conditions.

Average cost burdens decreased in September, thereby ending a four-month period of rising input prices. Manufacturers cited lower prices for a range of raw materials, particularly metals, alongside decreased oil-related costs.

Meanwhile, factory gate charges dropped for the first time since August 2012. Anecdotal evidence from survey respondents suggested that falling commodity prices, intense competitive pressures and softer demand conditions were all factors contributing to price discounting in September. 

US Factory Activity Matches Expectations


Markit | Joana Taborda | joana.taborda@tradingeconomics.com
9/23/2015 2:55:55 PM