We had the official PMIs for September earlier:
This is the private survey, a different survey to the official. In a nutshell there is a great representation of smaller firms compared to the SEO-heavy official PMI survey.
Comes in at 51.4 …. I did a double take!
- expected 50.2, prior 50.4
Wow, a big beat and so much better than the official survey result earlier.
- the best for this indicator since February of 2018
Commentary from Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group gives insight into the results. Some strong details, some not so much … :
signaling a recovery in the manufacturing sector.
1) Both the subindexes for new orders and output increased from the previous month. New orders grew at the fastest pace since March 2018. The measure for new export orders improved from the previous month, but it remained in contractionary territory. Growth in manufacturing demand was mainly driven by the domestic market as China-U.S. trade conflicts still restrained overseas demand.
2) The employment subindex remained the same as the previous month, coming in a bit lower than the line dividing expansion from contraction. Despite growth in new orders, employment did not grow. The gauge for backlogs of work increased to the highest since January 2018. As the labor market remains subdued, it's likely that there are structural issues in the labor market.
3) Both the measures for stocks of purchased items and stocks of finished goods rose marginally, indicating companies' cautious attitude toward stocking activities. The subindex for future output expectations increased, but it remained near a historic low, indicating subdued confidence among companies, which is negative for the recovery of manufacturing investment.
4) Both gauges for output charges and input costs rebounded, with input costs increasing at the fastest pace since November. The fluctuations in exchange rates and mutual tariff hikes between China and the U.S. were the main drivers of rising costs. The gauge for output charges rose slightly, but it remained in negative territory, reflecting that fierce market competition is negative for companies to improve their profitability.
more to come
