Markit Manufacturing PMI: February Down Fractionally, Continued Growth

The February US Manufacturing Purchasing Managers' Index conducted by Markit came in at 54.2, down fractionally from the 55.0 January figure. Today's headline number was slightly below the consensus of 54.4. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.

Here is the opening from the latest press release:

February data revealed that the U.S. manufacturing sector continued to expand at a robust pace, although the latest upturn was slightly weaker than seen at the beginning of 2017. This largely reflected a moderation in new order growth from January’s 28-month peak, alongside a slightly softer increase in output volumes. Meanwhile, manufacturers reported a sustained rise in inventory levels, which was linked to greater production schedules and expected improvements in client demand.

The seasonally adjusted Markit final US Manufacturing Purchasing Managers’ Index™ (PMI™) posted 54.2 in February, down only slightly from January’s 22-month peak of 55.0. As a result, the average reading for Q1 to date indicates that the manufacturing sector is on course to register its strongest quarterly improvement in business conditions for two years. [Press Release]

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

Markit Manufacturing PMI

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 ).

Markit and ISM Manufacturing PMI

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

Markit and ISM Manufacturing PMI

The two moving-average series began diverging in early 2015. The ISM index dipped into contraction in the third quarter of 2015 but then reversed directions in 2016 to its current level of modest expansion. The Markit series has trended more steady downward from its interim high early in the second half of 2014. We have seen a slight decline at the end of 2016 into 2017.