The Markit Flash U.S. Manufacturing Purchasing Managers' Index (PMI) fell 2.1% to 55.5 for March, according to a Markit report (link opens as PDF) released today.
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. An above-50 reading denotes general growth, while below 50 signals contraction.
This month's report follow on the heels of a fantastic February, when the Index hit 56.7, a nearly four-year high. Analysts had been estimating a 56.9 reading for March, but actual results clocked in at 55.5.
Nearly all components continued to expand, but at a slower rate. Output edged down 0.3 points to 57.5, new orders took a 1.6-point hit to 58.0, employment decreased 0.2 to 53.9, and work backlogs backed off 3.1 points to 54.8.
"The manufacturing PMI adds to evidence that the sector has shrugged off the weather-related weakness seen earlier the year, with strong demand encouraging firms to expand and hire new staff at a robust pace," said Markit Chief Economist Chris Williamson in a statement today. "The buoyant growth in March rounds off the best quarter for three years, indicating that the sector should provide a robust contribution to GDP in the first quarter. Growth was not as strong as February, but that's in many respects only to be expected after last month's numbers had been boosted by the rebound from January's severe weather. The fact that the output and new orders indices remained so strong in March is very encouraging news that the sector has come through the weather-related soft patch and continues to play an increasingly important role in the economic upturn."
Williamson emphasized the important role that continued expanding employment has to play, noting that a "sustained upturn in hiring" points to a positive outlook.