US manufacturing activity cooled some in October but remains in expansionary territory.
Markit’s flash US manufacturing PMI for October came in at 56.2.
Expectations were for the reading to come in at 57.0, down slightly from 57.5 last month, but still indicating growth in the US manufacturing sector.
This is the lowest reading for the report since July, and weaker than the 57.1 average seen during the third quarter, according to Markit.
Any reading over 50 indicates expansion, while a reading under 50 indicates contraction.
Markit’s report said that new business growth was the main negative influence on the October reading, as the rise in new orders was the slowest in nine months.
Markit also said that, “A number of survey respondents commented on more cautious spending patterns among clients, especially in relation to export sales.”
Chris Williamson, chief economist at Markit said:
“Although output growth slowed to the weakest since March, the pace of expansion remains robust. Even expanding at this slower rate, the goods producing sector should help drive another solid upturn of the economy in the final quarter of the year. A concern is that growth of new orders weakened sharply, which may translate into a further slowdown in coming months. The source of the slowdown appears to be weaker economic growth in key markets such as the Eurozone, China and other emerging markets, which has hit export performance. Many companies reported that domestic demand remains reassuringly strong.”
The flash PMI from the US comes after Markit’s flash reading for Chinese manufacturing, which beat expectations but was not, overall, a very encouraging report.