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economic outlook Archives - Shopfloor

NFIB: Small Business Optimism Index Rebounded in July to a Five-Month High

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The National Federation of Independent Business reported that the Small Business Optimism Index rebounded, up from 103.6 in June to 105.2 in July. The previous reading had been a post-election low—albeit one that still represented a highly positive outlook—and the new one was the highest since February. Overall confidence remained not far from January’s assessment (105.9), which was a 12-year high. To illustrate the boost in optimism across the past 12 months, the headline index stood at 94.6 one year ago. Along those lines, the percentage of respondents suggesting that the next three months would be a “good time to expand” increased from 21 percent to 23 percent. In July 2016, just 8 percent said the same thing. Read More

ISM: Manufacturing Activity Expanded Strongly in July but Eased from June’s 34-Month High

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The Institute for Supply Management (ISM) said that manufacturing activity continued to expand strongly in July, even as it pulled back from nearly a three-year high in June. The ISM Manufacturing Purchasing Managers’ Index (PMI) decreased from 57.8 in June, its strongest reading since August 2014, to 56.3 in July. Despite some easing in many of the key measures in this survey, the underlying data reflect healthy expansions in demand and output, with manufacturers mostly upbeat in their outlook. The sample comments tend to echo these sentiments, noting strong sales, exports and profits. In addition, better growth in the sector has exacerbated workforce challenges, with one respondent suggesting, “Labor shortages are pretty universal, leading to longer lead times through the supply chain.” Read More

Dallas Fed: Growth in Manufacturing Activity Remained Strong in July

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The Dallas Federal Reserve Bank reported that manufacturing activity remained strong in July. The composite index of general business activity increased from 15.0 in June to 16.8 in July, expanding for the 10th straight month. Overall, the data reflect some progress in the Texas economy, with the headline index jumping from an average of 4.0 in the second half of 2016 to 18.5 through the first seven months of 2017. Despite the optimism in the headline number, the sample comments provided mixed assessments of the current economic climate, with two respondents suggesting their activity was “good, not great.” Another referred to it as the “summertime blues.” Yet, the majority remained mostly positive in their outlook even as they grapple with challenges ranging from foreign competition to difficulties in identifying qualified workers. Read More

Kansas City Fed: Manufacturing Activity Continued to Expand Modestly in July

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The Kansas City Federal Reserve Bank said that manufacturing activity expanded for the eighth straight month and continued to expand at a modest pace in July. With that said, the composite index of general business conditions edged down from 11 in June to 10 in July. The underlying data were mixed. On the positive side, new orders (up from 4 to 10) grew at a faster pace for the month to its best reading since March, and hiring (unchanged at 15) remained strong. Yet, other measures slowed, including production (down from 23 to 4) and the average workweek (down from 7 to 1). Nonetheless, shipments (down from 23 to -2) slipped into contraction for the first time in one year, and exports (down from 3 to -2) dropped for only the second time this year. The sample comments tended to mirror these differing views, ranging from signs of optimism in terms of sales to other respondents citing caution on capital spending and lingering challenges in identifying quality labor candidates. Read More

Richmond Fed: Manufacturing Activity Expanded More Strongly in July

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The Richmond Federal Reserve Bank said that manufacturing activity in its district expanded more strongly in July, with activity accelerating to a 3-month high. The composite index of general business activity rose from 11 in June to 14 in July. (Note that these data have been revised from the prior release to reflect a new seasonal adjustment.) The sector has now expanded for 10 straight months – a sign that conditions have improved from more lackluster activity prior to that. Year-to-date, the headline index has averaged 13.3 so far in 2017, up from 2.1 in the same time period in 2016. In July, manufacturers in the mid-Atlantic region noted monthly pickups in new orders (up from 14 to 18), employment (up from 5 to 10), the average workweek (up from 1 to 9) and wages (up from 10 to 17), with shipments growth unchanged (13). The backlog of orders (up from -4 to 11) increased for the first time since April. Read More

Conference Board: Consumer Assessments of Current Economic Conditions at a 16-Year High

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The Conference Board said that consumer sentiment rebounded in July after a springtime lull. The Consumer Confidence Index increased from 117.3 in June to 121.1 in July, which was not far from March’s 16-year high (124.9). To illustrate the jump in sentiment, the headline index has averaged 118.3 year-to-date in 2017, up from an average of 95.6 in the same seven-month time period in 2016. In this report, the improvement in perceptions stemmed from a better assessments of both current (up from 143.9 to 147.8) and future (up from 99.6 to 103.3) conditions. The measure for the current economic environment rose to a level not seen since July 2001. Overall, more consumers said business conditions were “good,” up from 30.6 percent to 33.3 percent, with 13.5 percent citing “bad” conditions, which was unchanged. Read More

Markit: Eurozone Manufacturing Slipped a Bit from a Six-Year High in July; U.S. Growth Picked Up

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After soaring to new multiyear highs in each of the last few reports, the IHS Markit Flash Eurozone Manufacturing PMI declined from 57.4 in June, a level not seen since April 2011, to 56.8 in July, a three-month low. Despite the somewhat slower growth in this latest survey, the underlying trend remains positive, with European manufacturers continuing to expand at decent rates. New orders (down from 58.7 to 57.1) and output (down from 58.7 to 56.9) decelerated in July but mostly reflected strong growth, with exports (unchanged at 57.4) and employment (up from 55.9 to 56.0) remaining promising. In a similar way, the future output index (down from 67.4 to 66.5) indicated healthy expectations for the next six months, albeit with some easing. The forward-looking index had been at its highest point since it was introduced in mid-2012 in June, and the current data is not far from that level. Read More

Philly Fed: Manufacturing Continued to Expand Strongly in July

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The Federal Reserve Bank of Philadelphia said that manufacturing activity continued to expand strongly in July. With that said, the composite index of general business activity decreased from 27.6 in June to 19.5 in July. Even with some easing for the second straight month, the headline index has averaged 29.7 year-to-date, illustrating the much-improved performance so far in 2017. The composite measure peaked at 43.3 in February, its best reading since November 1983. In July, manufacturers reported positive growth across-the-board, but many of the underlying data points decelerated. This included new orders (down from 25.9 to 2.1), shipments (down from 28.5 to 12.2), employment (down from 16.1 to 10.9) and the average workweek (down from 20.5 to 3.8). To illustrate the slower growth in this survey, the percentage of respondents saying that orders had increased in the month dropped from 44.8 percent in June to 30.5 percent in July, with those suggesting a decrease rising from 18.9 percent to 28.4 percent. Read More

New York Fed: Manufacturing Activity Growth Softened in July After Rebounding in June

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The Empire State Manufacturing Survey reported that growth in manufacturing activity softened in July after rebounding in June. The composite index of general business conditions declined from 19.8 in June—its fastest pace since September 2014—to 9.8 in July. It was the second straight monthly expansion, but the underlying data indicated slower growth in July across the board than in the prior survey. This included new orders (down from 18.1 to 13.3), shipments (down from 22.3 to 10.5), employment (down from 7.7 to 3.9) and the average employee workweek (down from 8.5 to 0.0). More than 35 percent of respondents said that orders were higher in both June and July, but the difference maker in this month’s data was the jump in those saying sales were lower, up from 17.0 percent to 22.3 percent. Yet, even with some easing, the manufacturing sector in the New York Federal Reserve Bank’s district is stronger today than at this point last year, with modest expansions in most measures. Read More

Manufacturing Production Rebounded Somewhat in June

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The Federal Reserve reported that manufacturing production rebounded in June, up 0.2 percent, after falling in two of the three prior months. Overall, springtime production in the sector was choppier than we would have desired or expected, especially given the more robust outlook in other data sources. Yet, even with some disappointment in recent months, the longer-term trend for output among manufacturers has been quite positive. Across the past 12 months, manufacturing production has risen 1.2 percent. It was the eighth consecutive positive year-over-year reading for manufacturing output and progress from the 0.2 percent year-over-year gain in June 2016. Similarly, manufacturing capacity utilization inched up from 75.3 percent in May to 75.4 percent in June. For comparison purposes, utilization in the sector was 75.1 percent one year ago. Read More