US manufacturing PMI slowed in April, as businesses reported a slowdown in production volumes and a decline in exports.
Markit Group’s flash US manufacturing PMI fell to 54.2 in April from 55.7 in March that was also the highest in five months. A median estimate of economists forecast US manufacturing PMI to reach 55.5 this month. A reading above 50.0 signifies expansion in manufacturing activity, whereas a reading below that level reflects contraction.
Manufacturers reported the weakest rise in production volumes in four months, with new business growth also slowing. New export orders declined in April for the first time since November of last year, signaling volatile international demand.
Despite a slowdown in manufacturing activity, job creation remained solid in April, Markit data showed.
“Manufacturers saw a disappointing start to the second quarter, reporting the weakest growth since January. Key to the slowdown was a weakening of export orders, in turn a symptom of the loss of competitiveness arising from the dollar’s strength,” said Markit chief economist Chris Williamson in a statement.
“However, while exporters are suffering, domestic demand looks to have remained robust, helping to sustain a reasonably strong production trend,” he added.
US manufacturing activity braved the cold winter weather in the first quarter amid a broad slowdown in the rest of the economy. The Commerce Department next week is expected to show first quarter GDP growth of less than 2 percent annually.
Markit also reported weakness in Eurozone manufacturing on Thursday. The flash Eurozone manufacturing PMI weakened to 51.9 in April from 52.2 in March. Germany’s flash manufacturing PMI came in at 51.9 in April, down from 52.8 the previous month, suggesting economic growth had weakened at the start of the second quarter.