Markit U.S. Manufacturing PMI Weakens in August

By Cara Lombardo Features Dow Jones Newswires

U.S. manufacturing output in August expanded at its weakest pace since June 2016, according to a report Friday.

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The IHS Markit U.S. manufacturing purchasing managers' index dropped to 52.8 in August from 53.3 in July. Readings above 50 indicate expansion, while anything below 50 indicates contraction.

Economists polled by The Wall Street Journal forecast a reading of 52.7.

The results don't include any impacts from Hurricane Harvey, as the survey was conducted from Aug. 11 to 24, the day before Harvey made landfall in Texas.

The report noted that while workforce numbers grew at the fastest pace in six months, production increases slowed, causing the level of outstanding business to rise for the first time since April.

Higher raw material prices, especially of steel and electrical components, increased costs during the month.

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Although August's mark is still above 50, "the decline in the PMI shows signs of a renewed stuttering of the manufacturing economy," said Chris Williamson, IHS Markit chief business economist. "The drop in the output index indicates that manufacturing could act as a drag on the economy in the third quarter, with exports dampening order book growth."

Still, he said he was encouraged by signs of improved domestic demand.

Write to Cara Lombardo at cara.lombardo@wsj.com

(END) Dow Jones Newswires

September 01, 2017 10:37 ET (14:37 GMT)