US: PMI Manufacturing Index Flash


Fri Feb 20 08:45:00 CST 2015

Consensus Consensus Range Actual Previous
Level 53.8 53.0 to 54.9 54.3 53.7

Highlights
Growth remains steady in Markit's US manufacturing sample where the flash February reading is holding little changed, at 54.3 vs 53.9 at month-end January and 53.7 at mid-month January. The plus side is led by production volumes, which are at a 4-month high. Dragging on the index are slower growth in employment, the slowest in 7 months, and slower growth in new business, the slowest in 13 months and weighed down especially by weakness in exports and also by weakness among oil & gas customers.

As in other reports, supplier deliveries are lengthening reflecting, not rising business conditions, but snags tied to heavy Northeast weather and the West Coast port slowdown. Also like other reports, both input and output prices are flat.

This report echoes the results of this week's Empire State and Philly Fed reports -- moderate growth for manufacturing this month.

Market Consensus Before Announcement
The Markit PMI manufacturing index (final) finished January at 53.9 versus 53.7 at mid-month. December's readings were the same: 53.9 for final December and 53.7 at mid-month. On the strong side were output volumes and employment, the latter is a special plus, while on the soft side was new business growth which is being held down by weakness in export orders. Here, the strong dollar and slowing foreign markets are a concern.

Weakness in the price-depressed oil & gas sector is also a factor holding down new business. Price pressures, because of oil, are very soft.

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.