Manufacturing Index Hits 6-Month Low

The Markit U.S. Manufacturing Purchasing Managers' Index (PMI) fell 4.8% to 52 for April, according to a Markit report (link opens a PDF) released today.

Athough an above-50 reading denotes positive change from the previous month, these newest numbers put the index at a six-month low. Analysts had expected a slight dip to 54.2 from March's final 54.6 reading. Last month's flash index clocked in at 54.9, "consistent with a solid rate of growth."

The "flash" estimate is typically based on approximately 85% to 90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data.

Backlogs of work and stocks of purchases both contracted from March to April, while output, new orders, employment, and quantity of purchases all slowed their expansion. The drop in new orders from 55.4 to 51.8 marks the weakest improvement in six months and is especially troubling for future outlooks.

Output prices and import prices both rose at a slower rate, while new export orders and stocks of finished goods expanded at a faster rate.

Chief economist Chris Williamson was quoted as saying:

"The biggest monthly fall in the PMI since June 2010 raises concerns that the U.S. manufacturing expansion is losing momentum rapidly as businesses and households worry about the impact of tax hikes and government spending cuts. The PMI suggests that output growth has slowed from an annual pace approaching 8% earlier in the year to only 2% at the start of the second quarter."

Williamson's words hint at a less-than-stellar Q1 GDP growth rate (to be announced this Friday) but point to more serious growth issues setting in hard for the second quarter.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2381044, ~/Articles/ArticleHandler.aspx, 11/29/2014 1:25:31 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 hours ago Sponsored by:
DOW 17,828.24 0.49 0.00%
S&P 500 2,067.56 -5.27 -0.25%
NASD 4,791.63 4.31 0.09%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes


Advertisement