March Flash PMI Ticks Marginally Higher

Economic readings for March are showing very marginal upticks from the weak readings seen in December to February. This was seen in recent days in the Philadelphia Fed and the Empire Manufacturing reports. Now we have a PMI Manufacturing Index flash reading, which came in at 51.4 for March. The breakeven line for growth is above 50.0, while a reading of under 50.0 represents economic contraction.

This is marginally higher than the 51.0 reading from February, but was under the 52.4 expected by Bloomberg. The EconoDay range of estimates was 51.5 to 52.5, so the minor uptick was actually less than all economists were looking for.

Key takeaways from the Markit release showed that U.S. manufacturing remains only slightly above the 50.0 gain/loss dividing line. Output and new business volumes rose at a slightly faster rate than in February, while factory gate charges decreased for the second month running.

This March reading remains well below the post-crisis average of 54.1.
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Several points were made. Issues helping the index were slightly stronger rates of output, new business and employment growth. A key factor weighing on the headline index for March was the sharpest decline in pre-production inventories since January 2014.

Although manufacturing production growth picked up from the 28-month low recorded in February, this was deemed one of the weakest upticks in two and a half years.

Flash PMI readings are not generally considered big market movers, and this one was just nowhere close enough to being too far off estimates to make much change.