Published April 23, 2013
NEW YORK – Manufacturing grew in April at its most sluggish pace in six months as demand from domestic customers fell, suggesting the American economy was losing momentum in the second quarter, a survey showed on Tuesday.
Financial data firm Markit said its "flash," or preliminary, Manufacturing Purchasing Managers Index (PMI) fell to 52.0 this month from 54.6 in March. That was the slowest reading since October 2012.
Output slipped to 53.6 from 56.6, its weakest rate of growth since last November. While new export orders rose, demand at home increased at its slowest pace in six months, with the new orders component coming in at 51.8 after hitting 55.4 last month.
The data "raises concerns that the manufacturing expansion is losing momentum rapidly as business and households worry about the impact of tax hikes and government spending cuts," said Chris Williamson, chief economist at Markit.
The results suggest output growth slowed from an annual pace of nearly 8.0 percent earlier this year to 2.0 percent at the start of the second quarter, Williamson said.
Gross domestic product due on Friday is likely to show the economy expanded at 3.0 percent annualized rate in the first quarter, rebounding from a weak performance in the final three months of 2012.
But the slowdown in manufacturing suggests "the picture looks to have already began to darken again, with growth set to weaken in the second quarter," Williamson said.
The "flash" reading is based on replies from about 85 percent of the manufacturers surveyed. Markit's final reading will be released on the first business day of the following month.
(Reporting by Steven C. Johnson, editing by Clive McKeef)