Survey Shows Manufacturing Expansion Still Modest
The Markit Flash U.S. Manufacturing Purchasing Managers' Index (PMI) remained essentially unchanged at 52.2 for June, according to a Markit report (link opens as PDF) released today, suggesting that U.S. manufacturing expansion remained modest for the month.
The "flash" estimate is typically based on approximately 85% to 90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. Although an above-50 reading denotes general growth, June's flash number is 0.1 points below May's final tally and marks the second-lowest level since October 2012. Analysts' expectations of a 52.7 reading proved overly optimistic.
In a statement released today, Markit Chief Economist Chris Williamson noted:
The U.S. manufacturing sector appears to have remained stuck in a low gear in June, rounding off the weakest quarter since the third quarter of last year. With the average PMI reading down to 52.2 (compared to 54.9 in the first three months of the year), slower growth in the goods-producing sector looks likely to have acted as a drag on the wider economy, pulling GDP growth down from the annualized rate of 2.4% seen in the first quarter.
The index's employment component took an especially hard hit, dropping 1.2 points to 50.4 as employers remain unconvinced about longer-term economic improvements. According to the report, hiring is at its weakest levels since early 2010.
Even as overall numbers point to negativity, Williamson did highlight a 0.4-point uptick in new orders to 53.7 as a potential sign of future production growth.
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