Commenting on the final PMI data, Chris Williamson, Chief Economist at Markit said: “With manufacturing output growth slowing to the weakest seen so far this year and exports falling for the first time since November, the survey results raise worries that the dollar’s appreciation is hurting the economy. “The slowing in the economy is accompanied by a renewed weakening of price pressures, linked to the exchange rate bringing down the cost of imports. Input prices showed one of the steepest falls seen since the recession, a cost-saving which producers often passed on to customers. Prices charged rose at the slowest rate seen for almost three years.
“The weakening growth trend and fall in price pressures add to a growing clutch of disappointing numbers which suggest the Fed will err on the side of caution and hold off from rate hikes until a clearer picture emerges of the economy’s health. Any policy tightening therefore looks likely to be deferred until at least September, but the fact that both manufacturing and services continue to grow at reasonably robust rates at the start of the second quarter suggest that rate hikes towards the end of the year should not be ruled out.”
