Markit’s flash manufacturing data reading for May came in at 56.2.
Expectations were for a reading of 55.5, up a tick from 55.4.
The output sub-index climbed to 59.6 from 58.2, the highest reading since Feb. 2011.
Here’s Markit Senior Economist Paul Smith:
The US manufacturing sector continued to gain strength heading into mid-year as supportive demand conditions led to the sharpest month-on-month increase in production for over three years. This provides further confirmation that industry will aid a rebound in U.S. GDP in the second quarter, and other indicators from the survey suggest that the sector has plenty of momentum heading into the summer and beyond. Total workloads are up markedly, and manufacturers are gearing up for growth by purchasing inputs at a record rate. Capacity constraints are subsequently feeding through to increased hiring with the survey showing payroll numbers rising at a rate consistent of 15-20 thousand manufacturing jobs being created in May.
Markit’s Purchasing Managers’ Index (PMI) is a composite index based on five of the individual indexes with the following weights: New Orders — 0.3, Output — 0.25, Employment — 0.2, Suppliers’ Delivery Times — 0.15, Stocks of Items Purchased — 0.1, with the Delivery Times Index inverted so that it moves in a comparable direction.
Here’s what it’s looked like recently:
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