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FR: PMI Manufacturing Final
| Consensus | Consensus Range | Actual | Previous | |
| Index | 52.8 | 52.8 to 52.8 | 52.8 | 50.0 |
Highlights
Manufacturing picked up in April, boosted by new orders and inventory building, with the PMI index increasing to 52.8 from 50.0 in March. The result matches the flash reading and the Econoday median forecast.
New orders and production increased at their fastest rate since the first quarter of 2022, which is generally a welcome sign. In this case, the increase is due to companies ramping up orders and production to get ahead of price increases and supply chain constraints resulting from the conflict in the Middle East.
In fact, input prices rose at the fastest rate in April than they did in nearly four years, while those for prices paid by customers rose at a slower rate. This indicates that producers are absorbing some of the costs, but this not something that will be sustainable for the longer-term.
Other signals are also flashing red, with higher delivery times, along with capacity constraints. So, while the overall sentiment improved, it masks a wide variety of negative developments.
Market Consensus Before Announcement
The consensus looks for no revision from the flash at 52.8 for the April final, up from 50.0 in March
Definition
The Manufacturing Purchasing Managers' Index (PMI) provides an estimate of manufacturing business activity for the preceding month by using information obtained from a representative sector survey incorporating around 400 companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The data are released by S&P Global.
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 S&P Global PMIs 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 S&P Global 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.