The manufacturing sector is still in a slow-growth state.
Markit’s flash manufacturing PMI released Tuesday came in at 51.4 for March. This missed economists’ expectation for the preliminary reading on the sector to print at 51.9, up from the final February print of 51.3.
Some improvement in the rate of output, new business and hiring supported the sector.
Meanwhile, pre-production inventories fell at the steepest pace in over two years.
In the release, Markit chief economist Chris Williamson said the lack of a strong rebound is “a disappointment.”
“US factories continue to endure their worst spell for three and a half years,” he said. “Headwinds include reduced spending by the struggling energy sector, the strength of the dollar, persistent weak global demand and growing uncertainty caused by the looming presidential election.”
In the past few weeks, regional manufacturing surveys for the month have come in stronger than expected. The Empire State manufacturing survey turned positive for the first time since July. And, the Philly Fed business activity index, which accounts for manufacturing activity, surged and read above zero for the first time in seven months.
Economists are watching out for any signs that the worst of the manufacturing malaise is over.
And just this morning, the Richmond Fed’s manufacturing index for March spiked from -4 to 22.