IHS Markit: U.S. Manufacturing Activity Improved in January to Its Best Month Since October 2014

The IHS Markit Flash U.S. Manufacturing PMI rose from 55.5 in January to 55.9 in February, registering the best reading since October 2014 and boosted by accelerating new orders (up from 56.7 to 57.8) and employment (up from 55.0 to 55.8). Similarly, the index for future output (up from 66.9 to 71.0) was just shy of December’s reading (71.1), which was nearly a two-year high. More importantly, this suggests very healthy growth in production over the next six months. At the same time, current output (down from 56.2 to 56.1) and exports (down from 52.9 to 52.1) eased slightly in the February survey but continued to grow at a promising pace. On the downside, input prices picked up in the latest survey (up from 58.6 to 61.9), with costs expanding at rates not seen since December 2012.

Meanwhile, manufacturing activity in Europe remained robust despite easing for the second straight month from December’s fastest pace since the introduction of the survey in June 1997. The IHS Markit Flash Eurozone Manufacturing PMI has declined from 60.6 in December, to 59.6 in January, to 58.5 in February, a four-month low. The underlying data continued to be encouraging despite softer growth across the board, including for new orders (down from 59.6 to 58.1), output (down from 61.1 to 59.5), future output (down from 68.2 to 66.7), exports (down from 58.4 to 56.8) and hiring (down from 57.9 to 57.2). Input costs also remained highly elevated despite a slight deceleration in February (down from 70.7 to 68.4).

In addition to data on Europe as a whole, IHS Markit also released figures for France (down from 58.4 to 56.1) and Germany (down from 61.1 to 60.3), both of which slowed to multi-month lows on weaker—but still reassuring—demand and output growth.

Final data on each of these surveys will be released on March 1.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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