The April US Manufacturing Purchasing Managers' Index conducted by Markit came in at 36.1, down 12.4 from the 48.5 final March 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:
"April saw the manufacturing sector struck hard by the COVID-19 pandemic, with output falling to an extent surpassing that seen even at the height of the global financial crisis. With orders collapsing at a rate not seen for over a decade, supply chains disrupted to a record degree and pessimism about the outlook hitting a new survey high, rising numbers of firms are culling payroll numbers.
“Consumer facing businesses are being hit by slumping demand from households as April saw widespread lockdowns, but business spending on inputs and equipment has also tumbled as companies slash production and investment.
“Smaller firms are being hit the hardest, and also reporting the highest job losses, but large firms are also seeing the sharpest downturn on record.
“With infection curves showing signs of flattening, it is naturally hoped that the economic downturn will also bottomout. As restrictions are lifted, demand should gradually revive, but the trade-off between risking a second wave of infections and bringing the economy back to life looks set to be one of the greatest challenges faced by policy- and lawmakers in recent history. The process will inevitably be led by caution, meaning recovery will also be frustratingly slow.” [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.
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