Markit Manufacturing: "Output Declines At Fastest Pace Since August 2009..."

The March US Manufacturing Purchasing Managers' Index conducted by Markit came in at 48.5, down 2.2 from the 50.7 final February figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.

Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:

“The final PMI data for March are even worse than the initial flash estimate, with manufacturing output slumping to the greatest extent since the height of the global financial crisis in 2009.

"Growing numbers of company closures and lockdowns as the nation fights the COVID-19 outbreak mean business levels have collapsed. While some producers reported being busier as a result of stockpiling and anti-virus activities, notably in the food and healthcare sectors, these are very much the minority, and most sectors reported a rapid deterioration in demand and production.

"Orders for capital equipment have deteriorated at a rate not seen since data were first available in 2009 as firms stopped investing in machinery. Companies have meanwhile reined-in spending on inputs and households have pulled back sharply on many forms of spending, especially for non-essential and big ticket items. With export sales also sliding, factories are facing a broad-based slide in demand which is already resulting in the largest job losses recorded since the global financial crisis. Worse is likely to come as consumer spending falls further in coming months as lockdowns intensify and unemployment spikes higher." [Press Release]

Here is a snapshot of the series since mid-2012.

Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here).

The next chart uses a three-month moving average of the two rather volatile series to facilitate our understanding of the current trend.