Tag: manufacturing activity

Kansas City Fed: Reduced Manufacturing Activity in March

The Kansas City Federal Reserve Bank said that manufacturing activity declined in March, contracting for the first time in 12 months. The composite index of general business conditions declined from 1 in February to -4 in March. Perhaps more worrisome, the decline in new orders accelerated (down from -10 to -20), falling for the third straight month. The sample comments provide clues about why this is the case, with respondents noting a number of headwinds impacting their demand. These include snowstorms, reduced crude oil prices, the stronger U.S. dollar and the West Coast ports slowdown. (continue reading…)

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Durable Goods Orders and Shipments Were Soft in February

The Census Bureau said that new durable goods orders declined 1.4 percent in February, falling for the fifth time in the past seven months. Much of the decrease in February stemmed from reductions in the demand for transportation equipment, with new orders in that sector down 3.5 percent in February. This included a reduction in sales for motor vehicles and parts (down 0.5 percent for the month) and fewer nondefense and defense aircraft orders (down 8.9 percent and 33.1 percent, respectively). Note that aircraft orders can be quite volatile from month to month, as nondefense aircraft orders had increased 122.2 percent in January. Therefore, we often look at this data by stripping out the transportation equipment sector, and when you do so, durable goods orders decreased by 0.4 percent – still a soft figure. This mirrors other data showing a number of headwinds dampening demand and output in the early months of 2015. (continue reading…)

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Richmond Fed: Manufacturing Activity Contracted in March

The Richmond Federal Reserve Bank said that manufacturing activity contracted in March, declining for the first time in 12 months. The composite index of general business conditions decreased from zero in February to -8 in March. The underlying data were lower across-the-board, reflecting weaknesses for the month in terms of overall activity and a deterioration from February’s numbers. This included new orders (down from -2 to -13), shipments (down from -1 to -13), capacity utilization (down from -4 to -7) and the average workweek (up from -6 to -4). As such, manufacturers clearly pulled back in a number of areas for the month, likely due to global slowness, a stronger dollar and reduced commodity prices. On the positive side, hiring (up from 4 to 6) continued to grow modestly, providing some encouragement moving forward. (continue reading…)

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Markit: Chinese Manufacturing Activity Declined Again

The HSBC Flash China Manufacturing PMI reflected reduced activity again, down from 50.7 in February to 49.2 in March. It has contracted in three of the past four months now, reflecting a decelerated rate of growth in China. China has reduced its target real GDP growth rate for 2015 to 7 percent. New orders (down from 50.4 to 49.3), exports (up from 47.1 to 49.0) and employment (down from 49.3 to 47.0) were all below 50 in March – the threshold signifying growth. It was the reduction in demand that pushed the headline index lower. On the positive side, output (unchanged at 50.8) continues to expand very modestly for the month, and the decrease in input prices (up from 42.2 to 44.7) have helped manufacturers in terms of costs, even as the rate of decline was less in March. (continue reading…)

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Philly Fed: Modest Manufacturing Growth in the District in March

The Federal Reserve Bank of Philadelphia reported that manufacturing activity has expanding modestly in March. The composite index of general business activity edged marginally lower, down from 5.2 in February to 5.0 in March. Overall activity has been softer-than-desired in the first three months of 2015, averaging just 5.5; whereas, the composite index had averaged a more robust 18.6 for 2014 as a whole. Nonetheless, the Manufacturing Business Outlook Survey has now expanded for 13 straight months, and business leaders in the district remain relatively optimistic about the coming months. (continue reading…)

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NY Fed: Manufacturers Expanded in March, but at a Slower Pace

The Empire State Manufacturing Survey reported expansion in the sector for the third straight month in the district, but at a slower pace. The composite index of general business conditions from the New York Federal Reserve Bank has declined from 10.0 in January to 7.8 in February to 6.9 in March. The underlying data suggest a mixed picture for the sector. The pace of shipments (down from 14.1 to 7.9) eased for the month, but continued to grow at a decent rate. In contrast, growth in new orders (down from 1.2 to -2.4) slipped into negative territory. Roughly one-quarter of survey respondents said that their orders had increased for the month, with 27.5 percent noting declines. As such, these data mirror other indicators which reflect current headwinds in the economy. (continue reading…)

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ISM: Manufacturing Activity Weakened in February on West Coast Ports, Reduced Energy Prices

The Institute for Supply Management (ISM) said that growth in manufacturing activity has continued to slow over the past few months, starting 2015 off on a weaker note. The headline purchasing managers’ index (PMI) has fallen from 57.9 in October to 52.9 in February, its slowest pace since January 2014, when severe winter storms dampened activity across-the-board. The sample comments suggest that the West Coast ports slowdown and falling energy prices were top-of-mind for many of the respondents, helping to explain much of this easing. At the same time, the stronger U.S. dollar and sluggish growth abroad were also likely factors, with export orders (down from 49.5 to 48.5) declining for the second straight month.  (continue reading…)

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Kansas City Fed: Manufacturing Activity Slowed to a Near Crawl in February

The Kansas City Federal Reserve Bank said that manufacturing activity slowed to a near crawl in February, mirroring the easing we have seen in other regions. The composite index of general business conditions dropped has declined from 8 in December to 3 in January to 1 in February. The silver lining, of course, is that activity in the sector continues to expand, albeit barely, as it has now for 14 straight months. Still, the weaker headline figure was pulled lower by contracting levels of new orders (down from -8 to -10), exports (down from -7 to -13) and employment (down from zero to -4). There were several reasons cited in the sample comments for the softness, including sluggish global growth, reduced crude oil prices and the West Coast ports slowdown. (continue reading…)

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New Durable Goods Orders Rebounded in January on Strong Aircraft Orders

The Census Bureau said that new durable goods orders rose 2.8 percent in January, rebounding from the 3.7 percent decline observed in December. It was the strongest increase in durable goods orders in six months, with demand off in four of the past five months. As such, manufacturing activity since July 2014 has been less-than-desired, providing a bit of a contrast with better demand and sentiment data elsewhere. The sluggish global economic environment has likely played a role in this softness. On a year-over-year basis, durable goods orders have risen 5.4 percent, but this strength is somewhat misleading, as it builds off of the significant weather-related slowdowns seen 12 months ago. (continue reading…)

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Richmond Fed: Manufacturing Activity Stagnated in February

The Richmond Federal Reserve Bank said that manufacturing activity stagnated in February, ending 10 straight months of expansion in the district. The composite index of general business conditions declined from 6 in January to zero in February, its lowest level since contracting in March 2014. Indeed, many of the underlying measures slipped into negative territory in February. This included new orders (down from 4 to -2), shipments (down from 10 to -1), capacity utilization (down from 9 to -4) and the average workweek (down from 8 to -6). As such, manufacturers clearly pulled back in a number of areas for the month, likely due to global slowness, a stronger dollar and reduced commodity prices. (continue reading…)

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