US Markit Manufacturing PMI Index for April Sees No Improvements

The US final PMI manufacturing index was unchanged from the earlier flash reading at 50.8, from March’s 51.5, and coming in contrary to expectations of a small upward revision. The data will maintain a lack of confidence in manufacturing with the sector still struggling to find the necessary spark for recovery.

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The index was significantly weaker than the first-quarter average of 2015 as the industrial sector struggled to gain any traction. There was a further small increase in the orders component, but at the lowest reading since December 2015 with export orders at the weakest level for 18 months, which had a wider impact in dampening demand.

Production did rise slightly over the month, but there was a further decline in order backlogs and the steepest rate of decline in unfinished business since September 2009.

There was an increase in input prices for the first time in seven months, but overall output prices declined further over the month. Although there was a fractional increase in the employment index for the month, the pace of job creation was the weakest for close to three years.

The data overall will maintain doubts whether the manufacturing sector cane secure a significant near-term improvement and is likely to dampen overall sentiment surrounding the economy. The ISM manufacturing index was slightly weaker than expected and also at 50.8 for April from 51.5 previously.

The dollar was already under pressure ahead of the data as EUR/USD moved above the 1.1500 level for the first time since August 2015, although USD/JPY did find some respite and held above 106.50. US Treasury prices remained lower, but 10-year yields had backed away slightly from daily highs just above 1.85% while the S&P 500 index was marginally higher in early dealings.

Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.