U.S. manufacturing growth decelerates in April, Markit flash PMI index drops to 52.8

The U.S. manufacturing growth surpassed the trend seen throughout the service economy in April; however, it was also the most subdued witnessed since September 2016. The headline Markit Flash U.S. PMI dropped to 52.8 on a seasonally adjusted basis from March’s reading of 53.3. This suggested another moderation in the manufacturing growth from the near two-year peak witnessed in January 2017.

Subdued paces of output and new order growth mainly weighed on the headline index in April, noted Markit. A slight recovery in manufacturing job creation from the seven-month low seen in March was the main upbeat development. Manufacturers were wary regarding their pre-production inventories in April. The drop in stocks of input concluded a six-month period of restricted inventory building. The data for April hinted at a sharp and quickening rise in average cost burdens throughout the manufacturing sector.

The pace of input cost inflation was the most rapid since December 2013. Survey respondents have attributed this to increasing prices of commodity, especially metals. In the meantime, pressure on margins from higher input costs added to the most robust rise in factory gate charges for nearly two-and-a half years.