Markit Manufacturing PMI: Four Month High in July

The July US Manufacturing Purchasing Managers' Index conducted by Markit came in at 53.3, up from the 52.0 final June figure. Today's headline number was slightly above the forecast of 53.2. 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:

July survey data signalled a solid improvement in operating conditions in the US manufacturing sector. The upturn in business conditions was largely driven by marked and accelerated expansions in both output and new orders. Meanwhile, firms added to their payrolls and raised purchasing activity at the quickest rates since February. Business confidence reached a six-month high, as firms became more optimistic regarding future output. Inflationary pressures remained relatively muted, despite a pick up in the rate of input cost inflation.

The seasonally adjusted IHS Markit final US Manufacturing Purchasing Managers’ Index™ (PMI™) registered 53.3 in July, up from 52.0 in June to signal a further improvement in the health of the sector. Notably, the latest improvement in operating conditions was solid and the strongest in four months. [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 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.