US factory and service output levels at seven-month lows in April

Alexander Bueso Sharecast | 21 Apr, 2017 15:05 - Updated: 15:05 | | |

factory, factories, manufacturing

The US economy softened at the start of the year, with levels of output in both the manufacturing and services sectors dipping to seven-month lows, the results of a survey showed, but economists believed there were good reasons to expect a rebound going forward.

IHS Markit's purchasing managers' index for America's factory sector slipped to a seven-month low of 52.8 for March, down from the prior month's reading of 53.3, driven by slower rates of output growth and new orders.

That undershot forecasts calling for a reading of 53.5.

In January, the rate of growth in manufacturing hit a nearly two-year high.

Similarly, a 'composite' gauge linked to both manufacturing and services output levels fell from 53.0 in March to 52.7 for April.

Commenting on the 'flash' PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: "The survey responses indicate that some froth has come off the economy since the post-election bounce seen at the end of last year."

According to Williamson, the survey results pointed to a slowdown in GDP growth from 1.7% in the first quarter to 1.1% for the second.

They were also consistent with a drop in monthly non-farm payrolls to around only 100,000.

Nonetheless, he added: "However, with inflows of new business picking up slightly in April and business optimism about the year ahead also brightening, there’s good reason to believe that growth could revive again in coming months."

More news

23 Jun Capital Economics sees limited upside for FTSE 100 in 2017 (and next)

The UK economy's performance will continue to exceed forecasts but multiple headwinds will just about brake any further gains in the FTSE 100 in 2017, analysts at one of the City's top research shops said.

23 Jun US oil rig count keeps climbing, Baker Hughes says

The number of oil rigs in operation in the US continued to climb last week, increasing by 11 to 758, according to the results of the most widely-followed survey tracking them.

23 Jun FX round-up: Sterling gains on dollar thanks to UK policy hawks coming to fore

Sterling managed Friday gains on the US dollar thanks to UK monetary policy hawks coming to the fore in recent days, but was otherwise down against a raft of commodity currencies.

23 Jun Europe close: Stocks end off lows as oil futures perk up

Stocks came off their worst levels of the day as crude oil futures perked up and trading on Wall Street got off to a positive start.

23 Jun London close: FTSE labours through Friday as sterling gains on underwhelming dollar

Stocks in London laboured through Friday as sterling made gains against an underwhelming US dollar a day after PM Theresa May met with European leaders in Brussels.

23 Jun US open: Stocks edge higher at the end of the week

Gains for steel and biotech shares saw Wall Street edge higher amid better than expected economic data and some dovish Fedspeak.

23 Jun Price pressures grow in US in June, PMIs show

Private sector firms in the US continued to record a solid rate of expansion amid signs that economic growth might pick up again, the results of a widely-followed survey showed.

23 Jun US new home sales beat forecasts in May, prices jump

Activity in America's residential real estate market continued to hum along at a solid pace last month, the latest official revealed, amid sharp price increases.

23 Jun Avingtrans gets extension on possible Hayward Tyler bid

Hayward Tyler updated the market on its discussions with Avingtrans on Friday, regarding the possible offer by Avingtrans for the company as announced on 31 March.

23 Jun BMR raises £0.35m as Kabwe plant construction progresses

BMR Group announced on Friday that Peterhouse Corporate Finance had raised £0.35m - before expenses - by way of a placing of 9,333,333 new ordinary shares of 1p each in the capital of the company, at 3.75p per share.