A reading of manufacturing sentiment sank in April to its lowest level in six-and-a-half years, according to data released Friday.
The flash manufacturing purchasing managers index from Markit fell to a reading of 50.8 in April from 51.5 in March. That is the lowest level since September 2009.
Softer rates of output and new business growth along with a weaker gain in employment were the main factors weighing on the index, Markit said.
Deteriorating performance of manufacturing suggests that growth could weaken closer towards stagnation in the second quarter
Chris Williamson, chief economist at Markit, said the data dashes hopes “that first quarter weakness will prove temporary.”
“With prior months’ survey data pointing to annualized GDP growth of just 0.7% in the first quarter, the deteriorating performance of manufacturing suggests that growth could weaken closer towards stagnation in the second quarter,” he said.
The flash estimate is typically based on approximately 85%-90% of total PMI survey responses each month.
Economists have been optimistic that manufacturing might be on the mend after the Institute of Supply Management index for March showed factory activity expanded for first time in the last six months in March.
The sector had been hurt by the strong dollar, weak global growth and excess supply.