Much of the recent data regarding manufacturing output and demand has reflected improvements, with signs of possible stabilization in the market. This included better data in this morning’s Empire State Manufacturing Survey, mirroring other sentiment reports. That makes the latest data on manufacturing production even more disappointing. The consensus expectation had been for a slight gain of 0.1 percent in March for manufacturing output; instead, production in the sector declined by 0.3 percent. In addition, February’s data were revised lower, down from the prior estimate of an increase of 0.2 percent to a decline of 0.1 percent. (The Federal Reserve conducted a new annual revision to reflect seasonal adjustments, and all of the data were revised with this release.) The bottom line was that manufacturing production grew just 0.4 percent over the past 12 months in March, down from 0.8 percent in February. Manufacturing capacity utilization was also lower, down from 75.4 percent to 75.1 percent, its lowest level in nearly two years. Read More
Manufacturing production grew 0.2 percent in February, extending the 0.5 percent gain seen in January. As such, output in the sector has begun 2016 on a somewhat stronger note than it ended 2015. To be clear, manufacturing activity remains weaker than we would prefer, particularly given the difficulties in growing export demand and with soft commodity prices. Still, manufacturing output has increased 1.8 percent over the past 12 months, up from 0.5 percent in December and 1.2 percent in January. With that said, production growth slowed considerably last year, with the year-over-year rate of manufacturing output down from 4.3 percent in January 2015. Capacity utilization for manufacturers was unchanged at 76.1 percent in February. Read More
Manufacturing production rose 0.5 percent in January, rebounding from softness in the second half of 2015 and providing a little encouragement at the start of the new year. Manufacturing activity remains softer-than-desired, particularly given difficulties in growing export demand and with falling commodity prices. Over the course of the past year, manufacturing output has increased 1.2 percent, representing some progress from the 0.5 percent pace observed in the prior report. Yet, production has slowed considerably since January 2015, when the year-over-year rate was a more-robust 4.3 percent. Capacity utilization for manufacturers rose from 75.8 percent in December to 76.1 percent in January. Read More
Manufacturing production stagnated in November, with output unchanged for the month following a gain of 0.3 percent in October. These data continue to reflect sluggish activity for the manufacturing sector, which continues to grapple with global weaknesses and lower commodity prices. The most recent NAM Manufacturers’ Outlook Survey echoed those anxieties, with sentiment easing significantly over the past 12 months and hiring and capital spending pulling back materially. Indeed, manufacturing production increased just 0.9 percent year-over-year in November, off sharply from the 4.3 percent pace observed in January. Capacity utilization for manufacturers edged slightly lower for the month, as well, down from 76.3 percent to 76.2 percent.
The underlying manufacturing numbers for November were mixed on a sector-by-sector basis. Output for nondurable goods firms rose 0.5 percent in November, rebounding from being flat in October. In contrast, durable goods manufacturing production shifted from a gain of 0.6 percent in October to a decline of 0.2 percent in November.
The largest gains in manufacturing output for the month were seen in the nonmetallic mineral products (up 1.2 percent), food, beverage and tobacco products (up 1.0 percent), computer and electronic products (up 0.7 percent) and miscellaneous durable goods (up 0.7 percent) sectors. At the same time, primary metals (down 2.8 percent), apparel and leather (down 1.3 percent), electrical equipment and appliances (down 1.3 percent), motor vehicles and parts (down 1.0 percent) and aerospace and miscellaneous transportation equipment (down 0.7 percent) experienced declining production in November.
Meanwhile, total industrial production fell for the third straight month, down 0.6 percent in November. This headline number was brought lower in the month by sharp production declines for both mining (down 1.1 percent) and utilities (down 4.3 percent). Over the course of the past 12 months, industrial production has decreased by 1.2 percent. This represents a significant change from the 4.5 percent rate of year-over-year growth seen in January. Along those lines, capacity utilization fell from 77.5 percent to 77.0 percent, its lowest level in two years.
Manufacturing production declined 0.1 percent in September, extending the 0.4 percent decrease observed in August. These data continue to show that softer-than-desired economic conditions globally have dampened demand and output for manufacturers in the United States. Indeed, production in the sector has now fallen in six of the past 10 months, which is quite disappointing, particularly when compared to the cautious optimism seen coming into this year. Capacity utilization for manufacturers declined from 76.1 percent to 75.9 percent. On a year-over-year basis, manufacturing production increased 1.4 percent in September, down from 1.8 percent in August and off sharply from the 4.3 percent observed in January. Read More
Manufacturing production declined 0.5 percent in August, falling back after rebounding strongly in July. Overall, these data continue to show the sector struggling with a number of economic headwinds, with output down in three of the past four months. Capacity utilization for manufacturers increased from 76.2 percent to 75.8 percent. On a year-over-year basis, manufacturing production increased 1.4 percent in August, down from 1.5 percent in July. This represented a sharp deceleration in output from the 4.3 year-over-year pace observed in January. Read More
Manufacturing production rebounded strongly in July, up 0.8 percent, but those gains came from a June figure that was revised lower, down 0.3 percent. Output in the sector was originally estimated to be flat in June. (Note that the data were also updated with a new base year, changing it from 2007=100 to 2012=100.) Capacity utilization for manufacturers increased from 75.7 percent to 76.2 percent. On a year-over-year basis, manufacturing production increased 1.5 percent in July, up from 1.4 percent in June. This represented a sharp deceleration in output from the quite-robust 6.0 percent year-over-year pace observed in January, and it reflects a number of significant headwinds facing manufacturers so far this year. This includes a stronger U.S. dollar, lower crude oil prices and weaknesses abroad. Read More
Manufacturing production was unchanged in both May and June, suggesting that output in the sector remains sluggish. On the positive side, the May figure was revised higher, as it was originally estimated to be a decline of 0.2 percent. Yet, it is clear that manufacturers continue to grapple with a number of economic headwinds, including a stronger U.S. dollar, lower crude oil prices and weaknesses abroad. The year-over-year pace reflects this softness, shifting from a more-robust pace of 4.5 percent in November to just 1.8 percent today. Capacity utilization for manufacturers has also eased over that time frame, down from 78.1 percent in November to 77.2 percent in June. Read More
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. Read More
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. Read More