August Markit Manufacturing: "Improvement in Operating Conditions"
The August US Manufacturing Purchasing Managers' Index conducted by Markit came in at 61.1, down from the final July figure.
Here is an excerpt from IHS Markit in their latest press release:
Siân Jones, Senior Economist at IHS Markit said:
“US goods producers continued to register marked upturns in output and new orders in August, as demand flourished once again. That said, constraints on production due to material shortages exerted further pressure on capacity as backlogs of work rose at a near-record rate.
“Not only were firms facing difficulties trying to clear outstanding work, they also faced further hikes in supplier costs. The pace of cost inflation exceeded the previous series record amid a pervasive scarcity of inputs. Favourable demand conditions allowed finished goods prices to also rise at an unprecedented rate, as firms sought to protect their margins.
“Delivery times lengthened at the second-sharpest rate in over 14 years of data collection, with purchasing activity still rising markedly. It was not only producers who highlighted stockpiling, however, as reports of customers shoring up their holdings of finished items resulted in a substantial drop in post-production inventories. Challenges rebuilding such stocks, including material and labour shortages, and everburgeoning levels of incomplete work are likely to remain a feature for some time to come.” [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.