Manufacturing is slipping again after an encouraging start to 2016.
Markit Economics’ flash manufacturing purchasing manager’s index (PMI) for February came in at 51, the lowest since October 2012.
But on a seasonally adjusted basis, that’s the lowest reading since September 2009, or around when the recovery was starting to take shape.
Economists had forecast that the preliminary reading was 52.5 according to Bloomberg, up just a bit from the prior reading of 52.4. But this reading was a big miss, as weak demand continued to crimp the sector.
“US factories are reporting the worst business conditions for over three years,” wrote Markit chief economist Chris Williamson in the release. “Every indicator from the flash PMI survey, from output, order books and exports to employment, inventories and prices, is flashing a warning light about the health of the manufacturing economy.”
Diving into the details, manufacturing output growth slowed, while order backlogs were the weakest since September 2009. Factory gate prices fell at the fastest pace since June 2012.
Because of the strong dollar, export sales slowed at the biggest pace since April 2015.
Jobs were still created in the sector, but employment growth was at the weakest pace in over three years.
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