Among the various components of the flash reading, there are nuggets of good news. Employment is expanding at a faster rate, with a reading of 52.7 in September compared with 52.4 in August. Output prices are rising, which indicates manufacturers can charge more to pay the also rising input prices. Unfortunately, input prices are rising faster than output prices.
The new order subindex reading rose from 51.9 to 52.4 a faster growth rate month-over-month. But Markit notes that new orders for exports fell at the steepest rate since October 2011.
Markit’s chief economist made some observations:
U.S. manufacturers reported another month of tough business conditions in September, rounding off the weakest quarter for three years. …
The principal cause of weakness remains the export market, with new export orders falling for the fourth successive month, and at an advanced rate of decline, reflecting the economic downturn in the Eurozone and slower growth in previously strong markets such as China and Japan.
Markit’s report is available here.
Paul Ausick
Contact [email protected] for any questions or corrections.
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