CN: CFLP Manufacturing PMI

Wed Sep 30 20:00:00 CDT 2015

Consensus Actual Previous
CFLP Mfg PMI 49.7 49.8 49.7

September CFLP manufacturing PMI reading was 49.8, slightly above the consensus of 49.7. The CFLP reading is above the flash Markit manufacturing PMI of 47.0. Any reading below 50 is contractionary. The CFLP service PMI was unchanged at 53.4.

The production index improved to a reading of 52.3 from 51.7. New orders improved climbing above the breakeven 50 level for the first time since June. However, new export orders remained in contractionary level. Imports also remained in contractionary territory as did input prices, raw materials inventories and employment.

A survey of about 800 purchasing managers about the health of the manufacturing sector. The numeric result is a diffusion index. A reading above 50 indicates that manufacturing is growing. A reading below 50 indicates contraction.

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 purchasing managers' manufacturing indexes, 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 CLFP 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. The survey tends to have a greater impact when it is released prior to the HSBC/Markit manufacturing PMI because the two reports are correlated.