US Manufacturing PMI Rises To Highest In 12 Months

Tyler Durden's picture

When 2016 started off poorly for the US manufacturing sector as a result of the pounding in the E&P sector, with rising concerns about a recessionary impulse among US manufacturing industries, the latest Markit manufacturing report for October has allayed much of the slowdown concerns with a headline print of 53.2, higher than the 51.5 expected, and up 1.7 points from September - the highest print since October of 2015.

Notably, the new orders index also rebounded to 54.7 from 51.1 previously, and also the highest in 12 months.

Manufacturing production has now increased for five months running, following a slight dip in May. Survey respondents cited an accelerated pace of new business growth and, in some cases, efforts to boost production in anticipation of stronger client demand in the months ahead.

According to the report, October data signalled that U.S. manufacturers started the fourth quarter in a strong fashion, with output and new order volumes rising at markedly faster rates than in September. A rebound in business conditions contributed to greater input buying among manufacturing firms and renewed pressures on capacity. At the same time, manufacturers sought to boost their stocks of inputs, with pre-production inventories rising for the first time since November 2015.

Manufacturers reported that supportive domestic economic conditions remained a key growth driver, helping to offset sluggish export sales in October. Survey respondents also noted that increased production and greater purchasing activity reflected hopes of a post-election upturn in client demand

Higher levels of incoming new work resulted in a greater degree of backlog accumulation across the manufacturing sector during October. The latest rise in unfinished work was the largest for 12 months.

However, while the rebound was broad based, the weakness within the
employment subcomponent remains, and declined modestly in October
relative to the previous month. Some firms commented on increased capacity pressures at their plants, in part reflecting subdued job hiring in recent months. Latest data  signalled only a moderate rise in payroll numbers, and the rate of expansion was weaker than in September.

The latest survey indicated a robust upturn in input buying among manufacturing firms, which was linked to projections of rising demand and associated efforts to boost inventories. Moreover, the increase in purchasing activity was the fastest since June 2015. This contributed to a rise in preproduction stocks for the first time in 11 months. At the same time, finished goods inventories stabilized in October, which ended a four-month period of decline.

Of note, for the first time in over a year, inflationary pressures were cited as a factor concerning the respondents:

"Manufacturers indicated that cost pressures intensified in October, with the latest increase in input prices the fastest for almost two years. Anecdotal evidence cited greater raw material prices and rising transportation costs. Meanwhile, factory gate charges increased for the first time in three months and the rate of inflation was the strongest since November 2014.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“Manufacturing showed further signs of pulling out of the malaise seen earlier in the year, starting the fourth quarter on a solid footing. Both output and new orders are rising at the fastest rates for a year amid increasingly widespread optimism that demand will pick up again after the presidential election, which has been commonly cited as a key factor that has subdued spending and investment in recent months.

“There are also signs that the drag from cost-cutting policies of deliberate inventory reduction is moving into reverse. Inventory-building should therefore provide an extra boost to the economy in the fourth quarter.

“Weak export growth, attributable to the strong dollar, and lacklustre hiring remain big areas of disappointment, and highlight an ongoing dependency on domestic demand and a need to keep labour costs low amid a still-uncertain economic and political outlook.”

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Turin Turambar's picture

Yeah, and unemployment is below 5%.  /sarc

Rich Stoehner's picture

The /sarc index is at all time highs.

Oldwood's picture

Thank GOD!!!

We are SAVED!!!

This MUST be attributable to Hillary's rise in the polls! She and she ALONE can save us!

Fuck us all :(

MFL5591's picture

Laugahable!  Shows just how courrpt this whole group of trash is!  


Drain the swamp!  

ejmoosa's picture

All the data is gonna be good the next two weeks...

Revisions are for next month.

Drain the Swamp!


I think that is a message we should include on every post and in every email.

"Drain The Swamp"


Here's a little Jim Stafford singing about Black Water Hattie.

Shed Boy's picture

So....what exactly is it we manufacture? Most of the cars have components made in other countries, so we just "assemble" them here. What do we manufacture that would make any dent in our GDP?

NoDebt's picture

We are the world leader in the manufacture of new debt.  So we've got that going for us.

Mr. Magoo's picture

We are also the largest manufacturer of Fast Food hamburgers. a lot more people eating out these days that must be the reason

SoDamnMad's picture

We manufacture TERROR. Drones and Hellfires have to come from somewhere.

Everybodys All American's picture

Is their an important election coming?

crackpuff's picture

Another inventory frenzy on desperate anticipation of higher future demand that will once again end in vanquished hope and bitter dispair

tarsubil's picture

Hooray! The non-recession recession is non-over over.

silverer's picture

A miracle recovery, sure to drive stocks up 10% or more. Now, just add a nuclear war for even more increases in stock prices. Seriously, look for the correction to these numbers about two months after Hillary is posted to the big chair.

I am Jobe's picture

Haloween Candy and Hookers are doing well . 

Serfs Up's picture

Geez if you can't trust ""market"" signals.  What can you trust?

Polls, for sure the polls, but anything else?

Well, the MSM, you can trust them too, of course, but I mean anything else?

The election results!  Of course, you can trust those too.  

And the gold price, it also is a perfectly trustworty signal.

And everything said by the US/NATO about Russia.  That too of course.

Clearly, everythng is perfectly, 100% as it seems, and there's nothing to doubt, especially these ""markets""

BabaLooey's picture

"Seasonly Adjusted"

The Moronic Season

Consuelo's picture



A little bit of 'back story' would be helpful here.


- What are the items being manufactured?

- Where are they being manufactured?

- From what sectors?



Elco the Constitutionalist's picture
Elco the Constitutionalist (not verified) Oct 24, 2016 10:13 AM

Remove oil and refineries and you are left with what?

redc1c4's picture

well, the bullshit manufactuers are obviously running 3 shifts a day, 7 days a week...

the rest of the market?

not so much. i call shenanigans.

johnwburns's picture

Hate to be pro-conspiratorial but I smell a downward revision after the election, how long after depending on who wins. 

Nobody For President's picture

Manufacturing? We have manufacturing? Who would have know it?

Ag is doing OK. Here in Northern California, the Green Rush is in full swing, and local businesses are booming. Too much god damn traffic, though.

KansasCrude's picture

Markit has no cred they are purely shills for the Feds.   I agree the only increases going on here is the robust expansion and mfg. of BULLSHIT!  Oh and fraud now seeing the Feds/Pentagon has misplaced $9.3 TRILLION DOLLARS from 2015 budget.  Are you FREAKING KIDDING ME! uh  probably not.

Catherine Austin Fitts on USA Watchdog....up to $50 TRILLION lost since 1998. OMG

1777's picture

Correction; the downward trend is only taking a break.