Manufacturing Sample Report Slowing

Growth in Markit Economics' manufacturing sample is slowing to a crawl, at 51.3 for final February which is, next only to February's flash of 51.0, the second lowest reading since October 2012. January, at 52.4, was a good month for the manufacturing sector with industrial production up and durable orders up, but the early indications on February are uniformly negative.

Production in this report slowed as did new orders where growth is at a 3-1/2 year low. Export orders fell the most since April last year. Backlog orders are also down and employment growth moderated for a second straight month. Respondents in the sample are citing caution among their customers as a key negative. In a convincing kicker, selling prices are down the most in more than 3-1/2 years.

This report, which runs hot compared to other manufacturing reports, is sitting near recovery lows and is offering its own signal of renewed trouble for manufacturing, a sector that continues to get hit by weak exports and weak energy-related demand.

Recent History Of This Indicator:
The final reading for the February manufacturing PMI is expected to hold steady, at a very soft consensus of 51.3 vs a February flash of 51.0 and a final January reading of 52.4. The February flash was the weakest reading in three years and included slowing across new orders, backlog orders, employment and production. In a convincing sign of weakness, selling prices were also down. Exports remain a central weakness of the report, reflecting soft global demand compounded by the strength of the dollar.