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US manufacturing activity hits highest in 5 months in September, IHS Markit says

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US manufacturing activity hits highest in 5 months in September, IHS Markit says

A worker moves a model Venice roadster vehicle at the Vanderhall Motor Works manufacturing facility in Provo, Utah, on September 25, 2018.

George Frey Bloomberg Getty Images

US manufacturing activity rebounded slightly in September, according to IHS Markit.

The seasonally adjusted US IHS Markit US Purchasing Managers' Index reached 51.1 in September, the highest level in five months, from 50.3 in August. Any reading above 50 shows an expansion.

"PMI news reaching a five-month high brings a sigh of relief, but manufacturing is not yet ready," said Chris Williamson, chief business economist at IHS Markit in a statement. "The September improvement fails to prevent US goods producers from supporting their worst quarter in a decade. Given these PMI figures, the manufacturing recession seems to have extended into the third quarter."

A faster increase in production was a major driver of the industry, Markit noted. Production recovery has been the fastest since April, following reports of demand and slightly stronger customer efforts to clear back orders, Markit said.

A different indicator from the Institute for Supply Management showed that the industry contracted in August, its first decline since 2016, a sign that the US-China trade war is biting the economy.

The ISM PMI reading for September will be released on Tuesday at 10 am ET. The sector is expected to recover from the August low of 49.1% to 50.1%, according to Dow Jones.

This is breaking news. Check again for updates.

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