Markit Manufacturing PMI: Down Fractionally in May

The May US Manufacturing Purchasing Managers' Index conducted by Markit came in at 52.7, down fractionally from the 52.8 April figure. Today's headline number was above the forecast of 52.5. 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:

At 52.7 in May, down fractionally from 52.8 in April, the seasonally adjusted IHS Markit final US Manufacturing Purchasing Managers’ Index™ (PMI™) was above the 50.0 no-change value, but signalled the weakest improvement in business conditions since last September. The latest reading pointed to a further growth slowdown from the 22- month high recorded in January (55.0). [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 steadily downward from its interim high early in the second half of 2014. We have seen a decline at the end of 2016 into 2017.