While January’s final manufacturing PMI print disappointed (52.4 vs 52.6 expectations) and dropped from its initial print, its still managed a seasonally-adjusted bounce off December’stwo year lows. As Markit warned, this is still one of the worst prints in the last 2 years as “the manufacturing sector continues to struggle against the headwinds of weak global demand, the strong dollar, slumping investment in the energy sector and rising financial market uncertainty.” ISM Manufacturing also rose very modestly but disappointed as December’s data was revised lower still with employment crashing to June 2009 lows.

This is the 5th month in a row since ISM manufacturing has been above 50…

Commenting on the final manufacturing data, Chris Williamson, chief economist at Markit said:

“Despite picking up slightly, the January PMI reading is one of the worst seen over the past two years, highlighting the ongoing plight of the manufacturing sector.

“One bright light appeared, in that order book growth picked up, led by an upturn in domestic demand. However, hiring remained in the doldrums, suggesting that firms remain cautious in relation to the business outlook and reluctant to expand capacity.

And then ISM Manufacturing data hit…

Notably employment collapsed and New Export orders crashed from December’s hopeful bounce.

Respondents were broadly pessimistics:

“The oil and gas sector continues to be challenged by low oil and gas prices. Risk of suppliers filing for bankruptcy and reducing their workforce is becoming an increasing risk. Our company workforce is also declining.” (Petroleum & Coal Products)

As Markit concludes…

“The manufacturing sector continues to struggle against the headwinds of weak global demand, the strong dollar, slumping investment in the energy sector and rising financial market uncertainty, all of which mean the goods-producing sector looks set to act as a drag on the wider economy again in the first quarter of 2016.”

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