[Screen Shot 2016 05 23 at 9.54.26 AM] The manufacturing recession may not have ended yet. A preliminary reading of activity in May showed that output fell for the first time since the peak of the Great Recession. Markit's flash manufacturing Purchasing Manager's Index (PMI) out Monday was 50.5. Economists had estimated that it improved to 51 from 50.8, according to Bloomberg. This index is basically on the edge of contraction, with 50 being the border between expansion and shrinkage. The manufacturing sector entered a slowdown last year after it was pressured by the energy downturn, the strong dollar and weak global demand. Although the services sector will continue to be an outsized driver of the US economy, manufacturing could be a drag on second-quarter growth, according to Markit chief economist Chris Williamson. "The weak manufacturing PMI data cast doubt on the ability of the US economy to rebound from its disappointing start to the year in the second quarter," Williamson said in the release. In May, some firms said uncertainty about the economy made them reluctant to spend, prompting them to reduce their production schedules, according to Markit. Manufacturers' outstanding work fell for a fourth straight month, indicating that operating capacity was slack. They continued to hire workers, but only at a slightly faster pace than the 34-month low recorded in April. The final April print of 50.8 marked the weakest improvement in business conditions since the series began in September 2009. Williamson said this dimmed hopes that weakness in the first quarter was temporary. Regional manufacturing readings from New York and Philadelphia released last week, which were weaker than forecast, also suggested that the sector's recovery is unraveling at a slower-than-expected pace. Deutsche Bank's Joe LaVorgna said last week that both surveys raise the risk that the Institute of Supply Management's manufacturing index for May due June 1 could slip below 50 into contraction. SEE ALSO: THE HOUSING CRISIS IS GREAT NEWS FOR AMERICA Join the conversation about this story » NOW WATCH: FORMER GREEK FINANCE MINISTER: The single largest threat to the global economy
 |
| READ THE ORIGINAL POST AT www.businessinsider.com |