August 2017 Manufacturing Survey Growth Remains In Expansion


The ISM Manufacturing survey improved and remained in expansion. The key internals were mixed but remained in expansion. The Markit PMI manufacturing Index, also released today, is in positive territory and modestly declined.

Analyst Opinion of the ISM Manufacturing Survey

ISM manufacturing index and Markit PMI movements have correlated with Industrial Production Manufacturing index only half the time in the last 12 months. Based on these surveys and the weak district Federal Reserve Surveys, one would expect the Fed’s Industrial Production index to be little changed. Overall, surveys do not have a high correlation to the movement of industrial production (manufacturing) since the Great Recession.

From Bloomberg/Econoday:

  Consensus Range Consensus Actual Markit Manufacturing — — 52.8 ISM Manufacturing 56.5 to 57.5 56.6 58.8

From the Markit PMI Manufacturing Index:

Manufacturing output expands at weakest pace since June 2016

  • Production rises at modest pace
  • Exports drag on order book growth
  • Employment increases at strongest pace in six months
  • August’s PMI reading signalled a further improvement in operating conditions among US manufacturing firms. The upturn was partly driven by an increase in new orders. In line with rising client demand, workforce numbers grew at the fastest pace in six months. However, production levels increased at the weakest rate since June 2016. As a result, the level of outstanding business rose for the first time since April. Inflationary pressures intensified, with input prices and output charges both rising at faster rates. Business confidence remained robust, but softened slightly since July.
  • The seasonally adjusted IHS Markit final US Manufacturing Purchasing Managers’ Index™ (PMI™) registered 52.8 in August, down slightly from July’s reading of 53.3. Nonetheless, the latest index figure signalled an ongoing improvement in operating conditions across the US manufacturing sector.

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