US: PMI Manufacturing Index

Wed Apr 01 08:45:00 CDT 2015

Consensus Consensus Range Actual Previous
Level 55.3 54.1 to 55.6 55.7 55.1

Rising production and rising orders gave a lift to Markit's manufacturing PMI, to a 5-month high of 55.7 for final March vs 55.3 at mid-month and 55.1 in final February. The strength in production, underpinned by a rise in backlog orders, is giving a lift to employment. On the negative side are export orders underscoring the FOMC's concerns over weak foreign demand and the negative effects of the strong dollar. Inflation readings are very low, at a nearly 6-year low for inputs and a 10-month low for finished goods.

This report has been running hotter than other anecdotal reports and much hotter than hard government data out of the factory sector, data that have been no better than flat. Later this morning, at 10:00 a.m. ET, the ISM will post its monthly manufacturing report with the Econoday consensus at a soft 52.5.

Market Consensus Before Announcement
The Markit PMI manufacturing flash index may have picked up slightly in March, based at least on the PMI flash which is at 55.3, a 5-month high and versus 55.1 in final February and 54.3 in mid-month February. New orders were also at a 5-month high as rising domestic sales offset declining export sales and weak sales out of the oil sector.

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.

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.

Markit originally began collecting monthly Purchasing Managers' Index (PMI) data in the U.S. in April 2004, initially from a panel of manufacturers in the U.S. electronics goods producing sector. In May 2007, Markit's U.S. PMI research was extended out to cover producers of metal goods. In October 2009, Markit's U.S. Manufacturing PMI survey panel was extended further to cover all areas of U.S. manufacturing activity. Back data for Markit's U.S. Manufacturing PMI between May 2007 and September 2009 are an aggregation of data collected from producers of electronic goods and metal goods producers, while data from October 2009 are based on data collected from a panel representing the entire U.S. manufacturing economy. Markit's total U.S. Manufacturing PMI survey panel comprises over 600 companies.