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ISM: Manufacturing Sentiment Negative for the Fourth Straight Month

By | Economy, General, Shopfloor Economics | No Comments

The Institute for Supply Management (ISM) said that manufacturing sentiment remained somewhat negative in January. The purchasing managers’ index for the sector edged marginally higher, up from 48.0 in December to 48.2 in January. It was the fourth straight month with the headline PMI under 50, which would suggest contracting sentiment among manufacturers over that time frame. This mainly reflected deteriorating employment (down from 48.0 to 45.9) and inventories (unchanged at 43.5), with the decline in hiring at its lowest level since June 2009, the last official month of the Great Recession. Indeed, manufacturers continue to worry about the impact of the global slowdown as we start the new year. This can be seen in export growth (down from 51.0 to 47.0). The exports index has contracted in seven of the past eight months on the strong dollar and soft growth abroad. Read More

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ISM: Manufacturing Activity Remained Negative in December for the Second Straight Month

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The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) remained negative for the second straight month. The composite index fell from 48.6 in November to 48.2 in December, its lowest level since June 2009. As such, manufacturers reported soft demand and production activity at the end of 2015, which represented a sharp contrast to the modest growth seen 12 months prior to that. Indeed, the ISM Manufacturing PMI was 55.1 one year ago, and it peaked last year at 58.1 in August 2014. The sector has struggled with sluggish growth abroad and lower commodity prices over much of the past year, dampening overall manufacturing activity. Along those lines, new orders (up from 48.9 to 49.2) and production (up from 49.2 to 49.8) continued to indicate weaknesses in the sector, even as each recorded some easing in the pace of decline in December. To be fair, however, the sample comments also noted some segments that were doing well at year’s end, particularly those aligned with the automotive sector. Read More

ISM: Manufacturing Activity Contracted for the First Time in Three Years in November

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The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) contracted for the first time in three years in November. The composite index fell from 50.1 in October to 48.6 in November, the first negative number since October 2012 and the lowest level since June 2009. This is one more piece of evidence that manufacturers continue to struggle in the face of a strong dollar, lower commodity prices and difficulties in growing international demand. Indeed, the index for new orders decreased from 52.9 to 48.9, representing a sharp decline from the more-robust pace of 63.0 observed in November 2014. Much like the headline figure, the new orders measure was the lowest since August 2012, or essentially in just over three years. Behind this number, new export orders (unchanged at 47.5) have declined in eight of the 10 months year-to-date. Read More

Markit: U.S. Manufacturing Activity Eased to a Two-Year Low in November

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After rebounding somewhat in October, activity pulled back again in November, according the most recent Markit Flash U.S. Manufacturing PMI data. The composite measure declined from 54.1 in October to 52.6 in November, its lowest level since October 2013. The headline index peaked for the year at 55.7 in March, with activity decelerating since then. Exports (down from 51.6 to 49.5) returned to negative territory in November, a sign of just how much the stronger dollar and weaknesses abroad have dampened international demand and overall sentiment. Other indices reflected slower growth for the month, even as there continued to be modest expansions in activity. This included new orders (down from 55.5 to 53.1), output (down from 55.4 to 54.6) and employment (down from 52.9 to 51.9). Read More

Markit: U.S. Manufacturing Activity Rose to a 5-Month High in October

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Activity rebounded in October in the United States, with the Markit Flash U.S. Manufacturing PMI jumping to its highest level since May. The composite measure rose from 53.1 in September to 54.0 in October, boosted by stronger output growth (up from 53.7 to 54.0) and a shift to slightly positive exports (up from 49.8 to 50.6). At the same time, new orders (down from 54.7 to 54.0) and employment (down from 52.2 to 51.4) both eased a bit for the month. These data suggest modest growth in demand and production for manufacturers in the U.S., even as the rate of growth for each remains slower than what was observed in the spring. The headline index peaked at 55.7 in March year-to-date, with the output index measuring a fairly robust 58.2 that month, but activity has decelerated since then on a number of global economic headwinds. Read More

Kansas City Fed: Manufacturing Activity Declined for the 8th Straight Month, but Stabilized in October

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The Kansas City Federal Reserve Bank said that manufacturing activity in its district declined for the eighth straight month, but it stabilized a bit in October. The composite index of general business conditions improved from -8 in September to -1 in October. This measure has been in negative territory in each month since March, with reduced crude oil prices, the strong dollar and weaknesses abroad pressuring the sector’s performance. At the same time, the October headline number was not far from being neutral, providing some encouragement. Indeed, much of this increase stemmed from a recovery in the pace of new orders (up from -8 to 7), its first positive reading so far this year, with production (up from 1 to 4) expanding slightly for the second consecutive month. Read More

ISM: Manufacturing Activity Stagnated in September

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The Institute for Supply Management’s (ISM) manufacturing purchasing managers’ index (PMI) reflected stagnant activity in the sector, falling from 51.1 in August to 50.2 in September. This was the lowest level since May 2013, illustrating the struggles that manufacturers continue to face in light of headwinds in the economy from the stronger dollar and sluggishness abroad. The sample comments echoed these challenges, specifically noting exchange rates, crude oil, China and “nervous” consumers. While activity remains ever-so-slightly expansionary (in that the PMI value remains above the key threshold of 50), new orders (down from 51.7 to 50.1) shifted from very modest growth in August to being essentially flat in September, and exports (unchanged at 46.5) were not helpful, contracting for the seventh time so far this year. Read More

Kansas City Fed: Manufacturing Activity Has Declined for Six Straight Months

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The Kansas City Federal Reserve Bank said that manufacturing activity in its district has declined for six straight months. The composite index of general business conditions edged lower, down from -7 in July to -9 in August, with this measure in solid negative territory since March. Overall, manufacturers continue to report contracting levels of activity, with reduced crude oil prices, the strong dollar and weaknesses abroad pressuring the sector’s performance. Indeed, various measures of activity were negative across-the-board. This included new orders (down from -6 to -9), production (down from -5 to -16), shipments (down from -2 to -15) and exports (up from -10 to -4). Exports have now declined for eight consecutive months. Read More

Markit: China’s Manufacturing Sector Slowed Once More, Down to its Lowest Level Since March 2009

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The Caixin Flash China General Manufacturing PMI declined from 47.8 in July to 47.1 in August, its lowest level since March 2009. The Chinese manufacturing sector continues to struggle, with its PMI data contracting for the sixth consecutive month. Manufacturing activity was down across-the-board, including new orders (down from 47.2 to 46.3), output (down from 47.1 to 46.6), exports (down from 46.9 to 46.0) and employment (down from 47.2 to 46.0). The new orders figure was also at a post-recessionary low. Indeed, a number of economic statistics continue to reflect decelerating activity levels, particularly relative to the paces observed earlier in the year or last year. These include industrial production, fixed asset investments and retail sales. With that in mind, the Bank of China has devalued the yuan, down 2.9 percent in the past two weeks, and the Shanghai Composite Stock Market Index has plummeted more than 32 percent since June 12. Such sharp moves have prompted growth worries in financial markets around the world. Read More

Philly Fed: Manufacturing Activity Expanded Modestly in August

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The Federal Reserve Bank of Philadelphia said that growth in the manufacturing sector in its district expanded modestly in August, picking up slightly from July. The composite index of general business activity increased from 5.7 in July to 8.3 in August. While this suggests some improvement for the month, growth in activity has decelerated since June’s 15.2 reading, which was the highest level so far in 2015. The headline figure rose primarily on strength in shipments (up from 4.4 to 16.7), with 36.0 percent of respondents suggesting that their shipments were higher in August, up from 23.5 percent in July. Similarly, hiring (up from -0.4 to 5.3) accelerated somewhat, with the percentage of those completing the survey saying that employment was increased up from 12.0 percent to 21.1 percent. The average workweek (up from 4.0 to 8.5) was also longer. Read More