The flash US purchasing managers index (PMI) for June has dropped from 54 in May to 52.9. The reading comes from research firm Markit Economics Ltd. According to Markit, this is the lowest reading since July 2011. The ‘flash’ reading is a preliminary index based on replies from about 85% of Markit’s usual monthly respondents.
Output rose slightly to 54.6, while new orders declined to 54.1. A reading of 50 or more indicates expansion. New export orders fell to 48.9 from 50.5 in May and backlogs fell from 51.6 to 48.9.
Output prices were lower, as were input prices and stocks of finished goods fell slightly indicating a faster rate of contraction.
Markit’s chief economist sums up the survey results:
The flash survey results show manufacturing growth continuing to slow in June, suggesting that output is currently growing at a quarterly rate of 0.8% at best.
The principal source of weak growth is the loss of foreign sales, with manufacturers reporting the second largest decline in new export orders since September 2009. The downturn reflects falling demand in the Eurozone and weaker economic growth in other export markets, including emerging markets such as China.
Markit also noted that the survey data suggests that June’s official data on non-farm employment will be weaker.
Markit’s report is available here.