US Manufacturing Growth at 5-Month High: Markit

The IHS Markit US Manufacturing PMI rose to 55.9 in October of 2018 from 55.6 in September, beating market expectations of 55.5, preliminary estimates showed. The reading pointed to the strongest expansion in factory activity since May, boosted by increases in new business and job creation offsetting a slowdown in output growth.

Improved rates of new business and employment growth were the main factors boosting the headline PMI in October, which more than offset a slight slowdown in production growth.

The latest rise in payroll numbers was the steepest since December 2017, which survey respondents attributed to capacity pressures and greater business investment spending at their plants. Higher levels of new work largely reflected stronger domestic demand in October. New work from abroad remained close to stagnation.

Manufacturers continued to indicate a sharp deterioration in vendor performance during October, driven by stock shortages and robust demand for inputs. The recent phase of worsening supplier leadtimes has been among the most intense seen since the survey began in 2007. There were widespread reports that stretched operating capacity and a spike in purchasing linked to trade tariff uncertainty had led to severe pressure on manufacturing supply chains.

Input cost inflation reached a five-month high in October, which was widely linked to metals tariffs and higher oil-related prices. At the same time, factory gate charges continued to increase at one of the fastest rates since the first half of 2011.

US Manufacturing Growth at 5-Month High: Markit

Markit | Stefanie Moya |
10/24/2018 1:53:41 PM