|Level||53.0||52.6 to 53.0||53.1||53.0|
Markit's sample is still in the growth column but, relative to its past performance, is signaling trouble in the manufacturing sector. The manufacturing PMI inched 1 tenth higher to a final September reading of 53.1 vs 53.0 in the September flash and October final readings. These readings are all near a two-year low.
New orders and production are slowing as is employment which, at a two-year low, is now slowing sharply. Input prices, pulled down by lower commodity prices and strength in the dollar, continue to fall while final prices, in a sign seen in many other September reports, showing its weakest result in three years.
Markit's sample is blaming an uncertain global outlook for the slowing, specifically weakness in export sales, as well as generally cautious customer spending patterns. Watch for the ISM index coming up at 10:00 a.m. ET.
Market Consensus Before Announcement
Growth in the manufacturing PMI is expected to come in just moderately above 50, in line with the flash reading of 53.0 which was right in line with August. Export weakness is holding down order growth and hiring is beginning to slow.
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.