Markit Manufacturing: "Record rise in manufacturing PMI amid looser COVID-19 restrictions"
The June US Manufacturing Purchasing Managers' Index conducted by Markit came in at 49.8, up 10 from the 39.8 final May figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:
“US manufacturers have reported a marked turnaround in business conditions through the second quarter, with collapsing production and demand in April at the height of the COVID-19 lockdown turning rapidly to stabilisation by June. The PMI posted a record 10-point rise in June amid unprecedented gains in the survey’s output, employment and order book gauges.
“The record rise in the New Orders Index, coupled with low inventory holdings, bodes well for a further improvement in production momentum in July. A record upturn in business sentiment about the year ahead likewise hints that business spending and employment will start to revive.
“However, while the PMI currently points to a strong v-shaped recovery, concerns have risen that momentum could be lost if rising numbers of virus infections lead to renewed restrictions and cause demand to weaken again.” [Press Release]
Here is a snapshot of the series since mid-2012.
Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here).
The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.