Tag: manufacturing activity

ISM: Manufacturing Activity Picked Up Somewhat in June

The Institute for Supply Management’s manufacturing purchasing managers’ index picked up a little in June. The headline PMI increased from 52.8 in May to 53.5 in June, returning to a level last seen in January. As such, this report indicates that manufacturing activity has begun to recover from the softer demand, output and hiring levels experienced earlier in the year, with a number of economic headlines challenging the sector. Still, that does not mean that manufacturers are out of the woods yet, with activity expanding at a slower pace than desired. To illustrate this point, the manufacturing PMI averaged 56.9 in the second half of 2014, but has averaged 52.6 through the first six months of 2015. (continue reading…)

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Kansas City Fed: Manufacturing Activity Declined for the Fourth Straight Month in June

The Kansas City Federal Reserve Bank said that manufacturing activity declined for the fourth straight month in June, albeit at a slower pace than in May. The composite index of general business conditions increased from -13 in May to -9 in June. The slower decline for the headline measure stemmed largely from an easing in the decrease of new orders (up from -19 to -3). Still, it is hard to paint this report in a positive manner, with continued sluggishness across the board. For instance, the rate of production weakened even further (down from -13 to -21), with shipments (down from -9 to -15), employment (up from -17 to -9) and exports (up from -9 to -5) all solidly in contraction. Exports have been negative for six consecutive months. (continue reading…)

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Richmond Fed: Manufacturing Activity Expanded at Fastest Rate since January

The Richmond Federal Reserve Bank reported that manufacturing activity expanded at its fastest pace since January – a sign that the sector has made progress since the spring. The composite index of general business activity improved from 1 in May to 6 in June. This figure was boosted, in particular, by stronger new orders (up from 2 to 11), its highest level since October. Shipments (up from -1 to zero) were unchanged for the month, but that represented some stabilization after four straight months of contraction. Overall, this report found modest growth in the manufacturing sector in the Richmond Fed district, which – while not as strong as we might prefer – found sentiment moving in the right direction. (continue reading…)

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Reduced Aircraft Sales Push Durable Goods Orders Lower, with Broader Market Edging Higher

The Census Bureau said that new durable goods orders declined by 1.8 percent in May, extending the 1.5 percent decrease observed in April. Nonetheless, while April’s lower data reflected broader softness in the market, the May pullback mainly reflected reduced aircraft sales for the month. Aircraft orders are often bulked together in batches, making them more volatile from month-to-month. As a whole, transportation equipment orders fell 5.4 percent in May, largely on the decreases for aircraft. Motor vehicles sales were flat. On the positive side, we would expect a significant uptick in this category in the June data, with aircraft sales lifted by the recent Paris Air Show. (continue reading…)

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Philly Fed: Manufacturing Activity Rose to Its Highest Level of 2015 So Far

The Federal Reserve Bank of Philadelphia said that new orders and shipments rebounded in June, lifting its headline manufacturing index to its highest level of 2015 so far. The composite index of general business activity rose from 6.7 in May to 15.2 in June, with the indices for orders (up from 4.0 to 15.2) and shipments (up from 1.0 to 14.3) each up strongly. The key to each of these measures was a drop in the percent saying that activity was declining. For instance, the percentage of respondents suggesting that shipments had declined in the month fell from 28.5 percent in May to 16.0 percent in June. This indicates that manufacturing activity has stabilized from weaknesses earlier in the year, providing some encouragement moving forward. (continue reading…)

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Manufacturing Production Fell Back Again in May into Negative Territory

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. (continue reading…)

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NY Fed: Manufacturing Activity Declined for the Second Time in Three Months in June

The Empire State Manufacturing Survey reported a contraction in activity for the second time in the past three months in June. The composite index of general business conditions from the New York Federal Reserve Bank fell from 3.1 in May to -2.0 in June. Overall, manufacturers in the region have observed a weaker business environment since November, with the headline index averaging just 3.3 over the past seven months (December 2014 to June 2015). In contrast, the composite measure averaged 17.0 in the seven months prior to that (May to November 2014), when demand and output were growing more robustly. This softer manufacturing climate reflects a number of headwinds in the economy. (continue reading…)

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Monday Economic Report – June 15, 2015

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. (continue reading…)

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ISM: Manufacturing Activity Rebounded a Little in May

The Institute for Supply Management’s manufacturing purchasing managers’ index rebounded a little from 51.5 in April to 52.8 in May. This was good news, particularly given the softness in this index seen year-to-date. Through the first five months of 2015, the headline index has averaged 52.4, well below the 56.9 average observed in the second half of 2014. This weakness has stemmed from a number of significant headwinds, including the U.S. dollar, lower crude oil prices and the West Coast ports slowdown, among other factors. Still, manufacturers have been cautiously optimistic in their outlook for the coming months, and as such, we would expect some recovery in overall activity for the sector. Hopefully, this is the beginning of a larger upward trend. (continue reading…)

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Dallas Fed: Manufacturing Activity Contracted in Texas for the Fifth Straight Month

The Dallas Federal Reserve Bank said that manufacturing activity contracted in Texas for the fifth straight month. The composite index of general business conditions declined from -16.0 in April to -20.8 in May, falling to its lowest level since June 2009. Manufacturers in the district continue to struggle with lower crude oil prices; although, there might also be a sense of stabilization. As one fabricated metal manufacturing respondent said in the sample comments, “With some recovery in the price per barrel of oil, the general feeling is that our business has leveled.”

Still, these data suggest that demand and production remain very weak right now. The underlying data were mostly lower across-the-board, with declines in activity getting larger, at least for now. This included measures for new orders (down from -14.0 to -14.1), production (down from -4.7 to -13.5), shipments (down from -5.6 to -13.2), capacity utilization (down from -10.4 to -11.6), employment (down from 1.8 to -8.2) and hours worked (down from -5.0 to -11.6). Illustrating this point, 31.0 percent of survey respondents cited declining new orders for the month, with just 16.9 percent noting increases. On the other hand, capital expenditures (up from 3.3 to 3.4) continued to expand somewhat modestly, providing some degree of optimism moving forward. (continue reading…)

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