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US manufacturing continues to rally in April

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US manufacturing continues to rally in April

Latest Markit PMI declines slightly, but still signals growth.

U.S. manufacturing business conditions continued to improve at the beginning of the second quarter, as highlighted by the Markit Flash U.S. Manufacturing Purchasing Managers’ Index registering 55.4 in April.

The index, which is based on approximately 85% of usual monthly replies, was down from 55.5 in March, but is still the third-highest since January 2013.

"With manufacturing acting as a good bellwether of the rest of the economy, the survey bodes well for further robust economic growth in the second quarter."

Sharper rates of output and new business growth boosted the Manufacturing PMI during April, while the main negative influence on the headline index was a rise in the suppliers’ delivery times component.

Chris Williamson, Chief Economist at Markit said about the results: “Manufacturers reported a solid start to the second quarter, with output growing at its fastest pace for over three years. With manufacturing acting as a good bellwether of the rest of the economy, the survey bodes well for further robust economic growth in the second quarter.

“Companies are taking on staff to build operating capacity in the face of an increasingly favorable outlook. The April survey recorded ongoing job creation in the region of 10-15k per month in the goods producing sector.

“This is a domestic-led upturn: although new export orders rose at an increased rate, faster growth of new orders is being driven by surging demand from US markets. With new orders growing at one of the fastest rates we’ve seen since the immediate rebound from the 2008-9 recession, further output and employment growth are to be expected in coming months.

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“Despite the upturn, there are signs of price pressures easing. Input costs showed the smallest rise seen over the past year and prices charged barely rose; something that will feed fears that the recovery remains on a weak foundation of intense price competition.”

 

 

 

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