PMI Manufacturing Purchasing Managers’ Index at Highest Reading Since January

Markit U.S. Manufacturing Purchasing Managers’ Index (PMI)rose to its highest reading since January 2013

Key points:

• PMI rebounds to ten-month high, signalling solid improvement in business conditions
• Output and new order growth accelerates sharply
• Rate of job creation slows

Commenting on the final PMI data, Chris Williamson, Chief Economist at Markit said:

“The U.S. manufacturing sector has shown surprising resilience in the face of the government shutdown. The average PMI reading so far in the fourth quarter is unchanged on the average seen in the third quarter and the survey is consistent with production growing at an annualised rate of approximately 2.5%.
“Large companies are leading the upturn, having escaped the impact of the shutdown, with output and new orders growth rending higher in recent months. SMEs suffered a bigger shutdown impact, but saw growth rebound again in November. Similarly, while employment rose in SMEs, it is larger firms that are driving job creation.
“One of the most encouraging trends we are seeing, however, is a surge in the production of capital goods such as plant and machinery, which is growing at the fastest rate since the financial crisis, fuelled by rising domestic demand. This is a great sign that companies are feeling sufficiently confident to be boosting investment.” 

From Markit:

The Purchasing Managers’ Index™ (PMI™) is a composite index based on five of the individual indexes with the following weights: New Orders – 0.3, Output – 0.25, Employment – 0.2, Suppliers’ Delivery Times – 0.15, Stocks of Items Purchased – 0.1, with the Delivery Times Index inverted so that it moves in a comparable direction.

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