Markit Manufacturing PMI: Improvement In September

by: Doug Short

By Jill Mislinski

The September US Manufacturing Purchasing Managers' Index conducted by Markit came in at 53.1, up from the 52.8 final August figure. Today's headline number was above the forecast of 53.0. Markit's Manufacturing PMI is a diffusion index - a reading above 50 indicates expansion in the sector, while below 50 indicates contraction.

Here is the opening from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:

"While the headline PMI remained resiliently elevated in September, despite disruption from hurricanes Harvey and Irma, the details of the survey are more worrying. Output growth was unchanged on August's 14-month low, and translates into stagnation at best in terms of the official manufacturing output data. Firms' expectations of future output growth also slipped to a four-month low."

"There was better news on the hiring front, with job creation perking up to a nine-month high. However, with employment rising faster than output, productivity may be slipping."

"Although the hurricanes appear to have made little overall impact on production, supply delays were widely reported and prices for many inputs rose, suggesting some near-term upward pressure on inflation." [Press Release]

Here is a snapshot of the series since mid-2012.

Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here, note that).

The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.

The two moving average series began diverging in early 2015. The ISM index expanded through most of 2016, but has seen a decline this year. The Markit series has trended more steadily downward from its interim high early in the second half of 2014.