US: PMI Manufacturing Index

Mon Apr 02 08:45:00 CDT 2018

Consensus Consensus Range Actual Previous
Level 55.7 55.5 to 55.7 55.6 55.3

The manufacturing PMI finishes March steady and firm at 55.6, 1 tenth lower than the mid-month flash and 3 tenths above February. Strength in new orders, including export orders, is a highlight of the March report as is a 3-year high for business expectations. Output is strong but slowing and the sample continues to hire but at an easing rate.

Capacity strains are evident including the sharpest increase in delivery times in four years and also a jump in input costs with respondents citing rising tariffs and also rising raw material costs. And higher prices are being passed through to customers with selling prices rising to a 5-year high.

The data are piling up showing accelerating factory conditions including building signs of inflation. This index has been on the climb over the last half year but is still running noticeably cooler than the ISM report which has been running very hot and which follows later this morning at 10:00 a.m. ET.

Market Consensus Before Announcement
The PMI manufacturing index is expected to come in at a final of 55.7 in March, unchanged from the mid-month flash and down slightly from February. Though orders and employment have been strong, this report has been running cooler than the ISM manufacturing index.

Based on monthly questionnaire surveys of selected companies, the Purchasing Managers' Manufacturing Index (PMI) offers an advance indication on month-to-month activity in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across manufacturing industries. The final index for the current month is released roughly a week after the flash.

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.