Markit Manufacturing PMI edges higher to 53.5 in September vs. 53.2 expected

Marco Green
September 23, 2020

The business activity in the USA manufacturing sector is seen expanding at a robust pace in September with the IHS Markit's advanced Manufacturing PMI rising from 53.1 in August to 53.5.

The IHS/Markit CIPS flash composite purchasing managers' index - which measures activity in the services and manufacturing sectors - fell to 55.7 this month from August's six-year high of 59.1, coming in below consensus expectations of 56.1.

United Kingdom private sector companies also pointed to another drop in business expectations for the year ahead, with the degree of optimism falling to its lowest since May.

France, where services are key, saw business activity "deteriorate" for the first time in fourth months. New order inflows increased in September after a solid contraction in August.

Jessica Hinds of Capital Economics warned that the data "suggest that the recovery is grinding to a halt, at least outside the German manufacturing sector".

Employment declined sharply in September as firms sought to control costs.

"Reinstating restrictions on business opening hours and encouraging people to work from home again could cause the recovery to stall completely in Q4", Pugh said.

"Indeed, it now seems likely that the United Kingdom restrictions will set back the economic recovery and cause GDP to stagnate in Q4".

Eurozone PMIs were also released on Wednesday, showing the bloc's economic recovery had all but stalled.

"The indication from the survey that growth momentum is quickly lost when policy support is withdrawn underscores our concern over the path of the labour market once the furlough scheme ends next month", said Williamson, adding that growth could fade further during the winter months, "especially as lockdown measures are tightened further".

This signals a stalling in United Kingdom economic activity in the future, given that the United Kingdom is tracking the Eurozone in terms of both covid-19 infections and the economic response.

The survey also indicated that confidence in the service sector was decreasing, with the flash PMI falling to 47.5 from 51.5 in August, reaching the lowest level since May, as well as falling short of expectations for a stable reading at 51.5.

The data provider said that Germany, the eurozone's biggest economy, continued to lead the recovery, though at a slower rate than previously.

Other reports by Click Lancashire

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