US: PMI Manufacturing Index Flash


Fri Jan 23 08:45:00 CST 2015

Consensus Consensus Range Actual Previous
Level 54.0 53.9 to 54.2 53.7 53.7

Highlights
Steady and moderate growth is the signal from the PMI manufacturing flash which came in at 53.7 in January from 53.8 in final December and a flash reading in December of 53.7. This index has been slowing to the softest readings in a year because of weakening oil & gas activity and weakening export orders. Lower oil prices, however, have been a plus for input cost pressure which declined in the January flash for the first time in two-and-a-half years. Early indications on manufacturing activity in January have been soft. Next readings will be Monday and Tuesday from the Dallas and Richmond Feds.

Market Consensus Before Announcement
The Markit PMI manufacturing index (final) for December came in at 53.9, down from November's 54.8. The flash reading for December was 53.7. New business gains and output both slowed in the month which respondents tied to uncertainty over the global economic outlook. Export orders did rise but weak demand was noted in the euro area and emerging markets. The news on hiring was downbeat with growth the slowest since July. A negative for employment was a marked slowing in backlog accumulation.

Definition
Purchasing Managers' Manufacturing Index (PMIs) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors. The flash index, usually released about a week before the final, gives a preliminary reading of conditions for the current month.

Description
Purchasing Managers' Manufacturing Index (PMIs) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy. The flash index, usually released about a week before the final, gives a preliminary reading of conditions for the current month.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the ISM manufacturing index in the U.S. and the Markit PMIs in the U.S. and elsewhere, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.

The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.