https://www.cmegroup.com/content/dam/cmegroup/images/common/default/article-940x600.jpg
US: PMI Manufacturing Final
| Consensus | Consensus Range | Actual | Previous | |
| Index | 56.0 | 56.0 to 56.0 | 54.9 | 55.9 |
Highlights
The S&P Global US Manufacturing Purchasing Managers’ Index came in at 54.9 in October, after 55.9 September, failing to meet expectations for 56.0 in the Econoday survey of forecasters. Activity – in terms of new orders and output – increased but at a slower pace in the face of notable headwinds.
Prices are a particular challenge, with input cost inflation surging higher to its greatest level since May’s near four-year high.
“Manufacturers widely reported that energy, fuel and transportation expenses had risen since September, and were key in driving up wider vendor prices,” the report said. “Tariffs also added to upward cost pressure, and metals like aluminum and steel were again reported to have risen in price.”
The short supply of inputs was another source of inflationary pressure - especially for any products related to AI data center build outs, compounded by tariffs and the disruption caused to supply chains by the conflict in the Middle East.
Looking ahead, manufacturers still have sufficient confidence in the outlook to expand employment steeply, with growth the highest since April 2021.
Market Consensus Before Announcement
As usual, forecasters see no revision in the October final from the flash at 56.0. That is nearly flat from 55.9 in September. These numbers indicate robust expansion in the face of surging price pressures.
Definition
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 production, 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.
Description
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.