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Subdued pace of manufacturing growth persists in March

Staff writer ▼ | March 22, 2016
March data indicated subdued growth momentum across the U.S. manufacturing sector, thereby continuing the trend seen throughout 2016 to date.
U.S. manufacturing
USA   Markit Flash U.S. Manufacturing PMI
At 51.4, the seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) was up fractionally from 51.3 in February, but still well below the post-crisis average (54.1).

Moreover, looking at the average PMI reading for Q1 as a whole (51.7), the headline index pointed to the weakest improvement over any quarter since Q3.

Slightly stronger rates of output, new business and employment growth helped to support the headline index in March, while a key factor weighing on the headline index was the sharpest decline in preproduction inventories since January 2014.

Although manufacturing production growth picked up from the 28-month low recorded in February, the latest rise was only marginal and one of the weakest seen over the past two-and-a-half years.

Anecdotal evidence from survey respondents suggested that relatively subdued demand conditions and, in some cases, efforts to streamline post-production stocks, had acted as a headwind to output growth in March.

New business volumes continued to increase across the manufacturing sector, but the latest expansion was only slightly faster than in February and still weaker than the post-crisis trend.

Survey respondents noted that lower capital spending across the energy sector and subdued export demand had weighed on overall new order growth.

Reflecting this, latest data indicated that new work from abroad was unchanged in March, following a marginal decline during the previous month. â–