The Richmond Federal Reserve Bank said that manufacturing activity expanded at a slower rate in November. The composite index of general business conditions declined from 20 in October to 4 in November. To be fair, the October figure represented the fastest pace since December 2010, and as such, some pullback might have been expected. The larger story is that manufacturers in the Richmond Fed district have now reported expanding levels of activity for eight straight months, with the headline index averaging 9 over that time frame. This suggests modest growth overall. (continue reading…)
Tag: manufacturing activity
The Federal Reserve Bank of Kansas City said that manufacturing activity picked up somewhat in its district in November. The composite index rose from 4 in October to 7 in November, its highest level in four months. Along those lines, the pace of production (up from 3 to 9), shipments (up from zero to 7) and employment (up from 6 to 9) improved for the month. In addition, export sales (up from -9 to 8) were positive for the first time since April. Yet, growth remains far from robust, with new orders (down from 2 to 1) decelerating for the fourth consecutive month and just barely above neutral. (continue reading…)
The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded very strongly in November, with its composite index measuring an off-the-chart 40.8 for the month. This was up from 20.7 in October, and you would have to go back two decades to find a higher figure (December 1993’s 41.2 reading). In fact, 49.2 percent of respondents to the Manufacturing Business Outlook Survey said that conditions had improved in November, up from 34.2 percent who said that same thing in October. Along those lines, the Philly Fed survey has registered above average index figures since the first quarter, averaging 23.0 from April to November. That suggests that manufacturers in the district are currently very positive about their businesses. (continue reading…)
Manufacturing production rose 0.2 percent in October. At the same time, output in the sector was revised down from an original estimate of 0.5 percent in September to 0.2 percent. As such, manufacturing production has been weaker over the past three months than desired. Capacity utilization among manufacturers has also edged lower over this time frame, down 77.8 percent in July to 77.2 percent in October.
On a year-over-year basis, manufacturing production has risen 3.4 percent since October 2013. That indicates modest growth over the past 12 months, and yet, it also reflects a deceleration in the year-over-year pace since peaking in July at 4.9 percent. (continue reading…)
The Empire State Manufacturing Survey reported a pickup in activity again in November after slowing somewhat in October. The New York Federal Reserve Bank’s composite index of general business conditions rose from 6.2 in October to 10.2 in November. While this figure reflects continued expansion in the sector, it is perhaps notable that the headline figure had averaged 21.2 over the five months of May through September. As such, growth for manufacturers in the New York Fed district has been more modest in the fourth quarter than it was mid-year. (continue reading…)
Here is the summary for this week’s Monday Economic Report:
Last week, we received a number of encouraging reports on the state of the manufacturing sector and the U.S. economy. The Institute for Supply Management reported that its manufacturing Purchasing Managers’ Index (PMI) rebounded, up from 56.6 in September to 59.0 in October. This brought the index back up to where it was in August, with both readings at their highest levels since March 2011. This suggests that the manufacturing sector was making healthy gains as we began the fourth quarter, and as further evidence, demand and production were both higher in October. In fact, the new orders and output indices have now been 60 or greater for six straight months. Hiring also picked up. (continue reading…)
The Census Bureau said that new factory orders declined 0.6 percent in September. Overall, this was a soft report, with durable goods orders off 1.1 percent and nondurable goods sales unchanged. The decline in durable goods resulted primarily from declining defense and nondefense aircraft orders, much as we learned from preliminary data released earlier. Nondefense aircraft sales, in particular, are often choppy, with sales usually announced in batches, and as a result, the month-to-month figures are quite volatile.
Excluding transportation, new factory orders were unchanged, suggesting softness in the broader sector beyond aircraft. Nonetheless, over the past 12 months, new manufacturing orders excluding transportation have risen 3.2 percent, which suggests modest year-over-year growth overall. (continue reading…)
The Institute for Supply Management’s (ISM) manufacturing purchasing managers’ index (PMI) grew strongly in October, rebounding after a disappointing headline figure in September. The main index rose from 56.6 in September to 59.0 in October, back to where it had been in August. As such, the August and October readings were both the highest levels since March 2011, suggesting healthy gains in the sector as we move into the fourth quarter. (continue reading…)
The Richmond Federal Reserve Bank said that manufacturing activity continued to expand at its fastest pace since December 2010. The composite index of general business conditions rose from 14 in September to 20 in October. It was the seventh consecutive monthly expansion since the winter-related contractions in both February and March. Indeed, much like other regional surveys, these data show an uptick in demand and production for manufacturers recently, with a mostly upbeat assessment for the coming months.
Looking specifically at current activity, manufacturing leaders in the Richmond Fed district noted sharply higher paces for new orders (up from 14 to 22) and shipments (up from 11 to 23). (continue reading…)
The Census Bureau reported that new durable goods orders were surprisingly soft in September, decreasing 1.3 percent. To be fair, much of that decline stemmed from lower defense and nondefense aircraft sales—a highly volatile segment of the market where orders are often quite choppy. Excluding transportation, new durable goods orders were off 0.2 percent, which, while somewhat more favorable, continued to reflect weakness. Retail sales were also lower in September, with consumer spending quite cautious overall. Therefore, this latest report would be somewhat consistent with that finding.