US manufacturing PMI flashes warning signal in December, Markit says

The US factory sector slowed sharply in December as the energy sector continued to be overwhelmed by the plunge in oil prices, the results of a survey showed.

Markit´s manufacturing sector purchasing managers´index dropped from 52.8 to 51.3 in December - its lowest print since October 2012.

"Although manufacturing only accounts for around one-tenth of the economy, the Manufacturing PMI exhibits a high correlation of 77% with GDP as industrial activity has an important cyclical impact on other parts of the economy.

"With many sectors such as transport and business services dependent upon the manufacturing economy’s health, the downturn in the survey data sends a warning signal that the US upturn appears to be rapidly losing momentum as we move into 2016. However, the picture will become clearer with the publication of services PMI numbers on Friday," said Chris Williamson, chief economist at Markit.