Steel Products
Flash PMI at Five Month High
Written by Sandy Williams
August 22, 2013
The Markit Flash U.S. Manufacturing PMI hit a five month high in August. The PMI registered 53.9 up from 53.7 in July indicating moderate growth in the manufacturing sector.
New orders increased in August attributed to better demand. Export orders continued to rise this month but softened from July levels. Production output rose slightly in August but at a slower pace than previously this year. Inventory levels dropped at the strongest pace since 2009.
Employment in the manufacturing sector rose due to increased workloads from higher production rates.
Input price inflation eased but input costs rose strongly on higher steel and packing prices. Selling prices rose as manufacturers passed higher input costs on to customers. Delivery times lengthened at the highest increase rate since April 2012.
Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said:
“The U.S. manufacturing sector saw only modest growth of production in August, suggesting that the economy is continuing to recover in the third quarter but that the pace of expansion remains disappointingly sluggish.
Hopefully the faster growth of new orders seen during August will translate into increasingly strong production gains in coming months, and also boost hiring. Job creation was the strongest for four months in August, but the sector is still barely contributing to non-farm payroll growth.
Policymakers will be encouraged by the sustained recovery and signs of strengthening demand, which add further weight to the possibility of the Fed starting to taper its asset purchases as soon as September. However, the Fed will also be wary of how fragile growth both at home and abroad is looking, and will therefore be keen to ensure policy is not tightened too much too fast.”
The Purchasing Managers’ Index™ (PMI™) is a monthly composite index based on five indexes: New Orders, Output, Employment, Suppliers’ Delivery Times and Stocks of Items Purchased. An index reading above 50 indicates in an expansion in that index area. The Index is based on a survey of 600 manufacturing companies in the U.S. The Flash PMI is an advance indication of final PMI data based on 85%-90% of the total PMI surveys received.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Products
September energy market update
In this Premium analysis we examine North American oil and natural gas prices, drill rig activity, and crude oil stock levels through September. Trends in energy prices and rig counts serve as leading indicators for oil country tubular goods (OCTG) and line pipe demand.
Market says cutting interest rates will spur stalled domestic plate demand
Market sources say demand for domestic plate refuses to budge despite stagnating prices.
U.S. Steel to halt slab conversion at Granite City Works
U.S. Steel said it plans to reduce slab consumption at its Granite City Works near St. Louis, a company spokesperson said on Monday. The Pittsburgh-based steelmaker will shift the production and processing of steel slabs to its Mon Valley Works near Pittsburgh and its Gary Works near Chicago. Citing a United Steelworkers (USW) union memo, […]
SMU Week in Review: September 1-5
Here are highlights of what’s happened this past week and a few upcoming things to keep an eye on.
HR Futures: Market finds footing on supply-side mechanics
As Labor Day marks the transition into fall, the steel market enters September with a similar sense of change. Supply-side fundamentals are beginning to show signs of restraint: imports are limited, outages loom, and production is capped, setting the stage for a market that feels steady on the surface but still unsettled underneath.