This week Ecolab released its 2014 Corporate Sustainability Report highlighting the company’s commitment to making the world cleaner, safer and healthier while protecting people and vital resources. A world renowned company in promoting sustainability, in 2014 alone, Ecolab was named to the FTSE4Good Index, The Civic 50, CR Magazine’s 100 Best Corporate Citizens, Newsweek’s Green Rankings and Ethisphere Institute’s list of the World’s Most Ethical Companies. (continue reading…)
Earlier today, the House of Representatives voted in favor of H.R. 160, the Protect Medical Innovation Act introduced by Rep. Paulsen (R-MN) to repeal the ill-conceived excise tax on the gross sales of medical devices. The decisive, bipartisan vote shows that Congress understands the negative impact this burdensome tax has had on medical device manufacturers, their employees and the patients that rely on their life-saving products. (continue reading…)
The Federal Reserve Bank of Philadelphia said that new orders and shipments rebounded in June, lifting its headline manufacturing index to its highest level of 2015 so far. The composite index of general business activity rose from 6.7 in May to 15.2 in June, with the indices for orders (up from 4.0 to 15.2) and shipments (up from 1.0 to 14.3) each up strongly. The key to each of these measures was a drop in the percent saying that activity was declining. For instance, the percentage of respondents suggesting that shipments had declined in the month fell from 28.5 percent in May to 16.0 percent in June. This indicates that manufacturing activity has stabilized from weaknesses earlier in the year, providing some encouragement moving forward. (continue reading…)
The Bureau of Labor Statistics said that the consumer price index rose by 0.4 percent in May, its fastest monthly pace since February 2013. This was largely due to higher gasoline prices, which increased 10.4 percent for the month. Indeed, the average price of regular conventional gasoline was $2.656 per gallon on June 1, up from $2.451 a gallon on April 27, according to the Energy Information Administration (EIA). (It has risen further since then, averaging $2.744 per gallon on June 15.) To be fair, of course, gasoline prices remain lower than they were one year ago, down 25.0 percent year-over-year. For instance, the EIA data suggest that the average price of regular gasoline on June 16, 2014, was $3.621 per gallon. (continue reading…)
The Federal Reserve downgraded its forecast for growth for 2015 in its latest economic projections. Fed participants now expect real GDP to grow between 1.8 and 2.0 percent this year, down from an estimate of 2.3 to 2.7 percent growth seen in its March forecast. Indeed, this represented the second downward revision in growth estimates for the year, decelerating from the 2.6 to 3.0 percent outlook observed in December. As such, the reduced outlook for the economy this year from the Federal Reserve mirrors similar drops in growth estimates from other economists – including me – in light of softer-than-desired performance over the past six months, both in the U.S. and globally. This is consistent with the latest NAM Manufacturers Outlook Survey, which found that respondents were less upbeat about future activity in light of headwinds from a stronger dollar, weaknesses abroad, lower crude oil prices and a still-cautious consumer.
Members of Congress, policy experts, economists, and industry leaders gathered at the Newseum in downtown Washington, D.C., yesterday morning for a policy breakfast briefing event to examine an important question: “Is India Open For Business?” after the first year of the Modi government. (continue reading…)
The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts were somewhat lower in May than expected. New housing starts declined from an upward-revised 1,165,000 units at the annual rate in April to 1,036,000 in May, which was below the consensus estimate of around 1.1 million. Both single-family (down from 719,000 to 680,000) and multi-family (down from 446,000 to 356,000) activity were both worse for the month.
On the positive side, starts continue to show improvement from the 900,000 pace seen just three months ago – a sign that the market has largely recovered from its weather-related softness earlier in the year. Indeed, part of the decline in May could simply be a function of the robustness in April’s reading (the highest since October 2007), with the data getting somewhat ahead of the underlying trend line. A pullback of some sort was probably inevitable. My current forecast is for 1.16 million housing starts by the end of this year. (continue reading…)
Manufacturing production decreased by 0.2 percent in May, falling back again after very modest increased in both March and April. Overall, these data confirm that manufacturing activity has been weak since November, with contractions in four of the past six months. The year-over-year pace reflects this deceleration, shifting from a more-robust pace of 4.5 percent in November to 1.8 percent today. Capacity utilization has also declined for five consecutive months, down from 79.6 percent in December to 78.1 percent in May.
Overall, these figures mirror other data illustrating how a number of economic headwinds have challenged the manufacturing sector in the early months of 2015. The most recent NAM Manufacturers’ Outlook Index, for instance, has dropped from 61.7 in December to 51.7 in June, a significant decline in sentiment in such a short period of time. In addition, estimates of growth for sales, capital spending and employment have also decelerated sharply, even as they continue to reflect modest growth moving forward. On the other hand, exports are expected to grow more sluggishly, with a stronger U.S. dollar and slowing economies abroad dampening demand. (continue reading…)
The Empire State Manufacturing Survey reported a contraction in activity for the second time in the past three months in June. The composite index of general business conditions from the New York Federal Reserve Bank fell from 3.1 in May to -2.0 in June. Overall, manufacturers in the region have observed a weaker business environment since November, with the headline index averaging just 3.3 over the past seven months (December 2014 to June 2015). In contrast, the composite measure averaged 17.0 in the seven months prior to that (May to November 2014), when demand and output were growing more robustly. This softer manufacturing climate reflects a number of headwinds in the economy. (continue reading…)
Here are the files for this week’s Monday Economic Report:
Manufacturers and other businesses came into this year with a lot of optimism, particularly given robust growth in the second half of last year. Instead, economic growth has been disappointing year-to-date. A number of significant headwinds have challenged the sector, including a stronger dollar, lower crude oil prices, the residual effects of the West Coast ports slowdown and cautiousness in consumer spending. Much of this can be seen in recent GDP and production figures, which have reflected recent declines in activity, particularly in the first quarter. (continue reading…)