Manufacturing Output Trips Over the October Government Shutdown
The U.S. manufacturing sector continued to grow in October, although at the slowest rate in 12 months. Markit’s Flash U.S. Manufacturing PMI — which is an advance reading based on about 85 percent of total PMI survey responses — registered just 51.1 for the month, down from 52.8 in September.
“The flash PMI provides the first insight into how business fared against the backdrop of the government shutdown in October, and suggests that the disruptions and uncertainty caused by the crisis hit companies hard,” said Markit chief economist Chris Williamson. “The survey showed the first fall in manufacturing output since the height of the global financial crisis back in September 2009.”
Output — arguably the most highly watched component of the headline index — fell dramatically, from 55.3 in September to 49.5 in October, indicating contraction. The index for new orders declined from 53.2 in September to 51.6 in October, signaling reduced demand that could negatively impact the industry moving forward. Markit reports that a number of manufacturers linked lower output to the downward trend in new orders.