Markit US January manufacturing PMI 55.0 vs 56.7 expected

Markit composite

  • Lowest since Oct
  • Final December manufacturing reading was 57.7
  • Manufacturing optimism about the year ahead at the highest in over a year
  • Services 50.9 vs 55.0 expected
  • Prior services was 57.6 — lowest since June
  • Composite 50.8 vs 56.9 expected
  • Prior composite 57.0
  • Weakest new orders since Dec 2020
  • Input inflation slowest since March 2020

This is a poor reading and comes with the market vulnerable. On services, the report said “labor shortages, employee absences and
the Omicron wave reportedly weighed on growth”.

Comments from IHS Markit economist Chris Williamson:

“Soaring virus cases have brought the US economy to
a near standstill at the start of the year, with businesses
disrupted by worsening supply chain delays and staff
shortages, with new restrictions to control the spread of
Omicron adding to firms’ headwinds.

“However, output has been affected by Omicron much
more than demand, with robust growth of new business
inflows hinting that growth will pick up again once
restrictions are relaxed. Furthermore, although supply
chain delays continued to prove a persistent drag on
the pace of economic growth, linked to port congestion
and shipping shortages, the overall rate of supply
chain deterioration has eased compared to that seen
throughout much of the second half of last year. This
has in turn helped lift manufacturing optimism about
the year ahead to the highest for over a year, and has
also helped bring the rate of raw material price
inflation down sharply. Thus, despite the survey
signalling a disappointing start to the year, there are
some encouraging signals for the near-term outlook ”

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