The Census Bureau said that new factory orders rose by 3.0 percent in June, up from $467.1 billion to $481.1 billion, rebounding from 0.3 percent declines in both April and May. This was the highest level since October 2014. Nonetheless, the bulk of that increase stemmed from a jump in nondefense aircraft and parts orders, up from $11.0 billion to $25.3 billion, likely centering around the International Paris Air Show. As a result, durable goods orders leapt 6.4 percent for the month, but edged up by just 0.1 percent with transportation equipment excluded. At the same time, nondurable goods orders were off by 0.3 percent in June, declining for the second straight month. Overall, new factory orders – which have struggled mightily over the past couple years – have largely trended in the right direction more recently, up 9.8 percent since June 2016. Excluding transportation, the gains were a still-healthy 6.9 percent year-over-year. Read More
The Institute for Supply Management (ISM) said that manufacturing activity continued to expand strongly in July, even as it pulled back from nearly a three-year high in June. The ISM Manufacturing Purchasing Managers’ Index (PMI) decreased from 57.8 in June, its strongest reading since August 2014, to 56.3 in July. Despite some easing in many of the key measures in this survey, the underlying data reflect healthy expansions in demand and output, with manufacturers mostly upbeat in their outlook. The sample comments tend to echo these sentiments, noting strong sales, exports and profits. In addition, better growth in the sector has exacerbated workforce challenges, with one respondent suggesting, “Labor shortages are pretty universal, leading to longer lead times through the supply chain.” Read More
The Dallas Federal Reserve Bank reported that manufacturing activity remained strong in July. The composite index of general business activity increased from 15.0 in June to 16.8 in July, expanding for the 10th straight month. Overall, the data reflect some progress in the Texas economy, with the headline index jumping from an average of 4.0 in the second half of 2016 to 18.5 through the first seven months of 2017. Despite the optimism in the headline number, the sample comments provided mixed assessments of the current economic climate, with two respondents suggesting their activity was “good, not great.” Another referred to it as the “summertime blues.” Yet, the majority remained mostly positive in their outlook even as they grapple with challenges ranging from foreign competition to difficulties in identifying qualified workers. Read More
The Kansas City Federal Reserve Bank said that manufacturing activity expanded for the eighth straight month and continued to expand at a modest pace in July. With that said, the composite index of general business conditions edged down from 11 in June to 10 in July. The underlying data were mixed. On the positive side, new orders (up from 4 to 10) grew at a faster pace for the month to its best reading since March, and hiring (unchanged at 15) remained strong. Yet, other measures slowed, including production (down from 23 to 4) and the average workweek (down from 7 to 1). Nonetheless, shipments (down from 23 to -2) slipped into contraction for the first time in one year, and exports (down from 3 to -2) dropped for only the second time this year. The sample comments tended to mirror these differing views, ranging from signs of optimism in terms of sales to other respondents citing caution on capital spending and lingering challenges in identifying quality labor candidates. Read More
The Census Bureau said that growth in new durable goods orders leapt 6.5 percent, up from $230.7 billion in May to $245.6 billion to June, rebounding from declines in both April and May. This was the highest level since July 2014’s all-time high of $290.7 billion. Nonetheless, the bulk of that increase stemmed from a jump in nondefense aircraft and parts orders (up from $11.0 billion in May to $25.3 billion in June), likely centering around the International Paris Air Show. Excluding transportation equipment, new durable goods orders were up by 0.2 percent in June, extending the 0.6 percent gain seen in May. New durable goods orders have generally trended in the right direction over the course of the past 12 months. New durable goods have soared 16.1 percent since June 2016, but excluding transportation, the year-over-year gain was a still quite healthy 6.8 percent. Read More
The Richmond Federal Reserve Bank said that manufacturing activity in its district expanded more strongly in July, with activity accelerating to a 3-month high. The composite index of general business activity rose from 11 in June to 14 in July. (Note that these data have been revised from the prior release to reflect a new seasonal adjustment.) The sector has now expanded for 10 straight months – a sign that conditions have improved from more lackluster activity prior to that. Year-to-date, the headline index has averaged 13.3 so far in 2017, up from 2.1 in the same time period in 2016. In July, manufacturers in the mid-Atlantic region noted monthly pickups in new orders (up from 14 to 18), employment (up from 5 to 10), the average workweek (up from 1 to 9) and wages (up from 10 to 17), with shipments growth unchanged (13). The backlog of orders (up from -4 to 11) increased for the first time since April. Read More
The Federal Reserve Bank of Philadelphia said that manufacturing activity continued to expand strongly in July. With that said, the composite index of general business activity decreased from 27.6 in June to 19.5 in July. Even with some easing for the second straight month, the headline index has averaged 29.7 year-to-date, illustrating the much-improved performance so far in 2017. The composite measure peaked at 43.3 in February, its best reading since November 1983. In July, manufacturers reported positive growth across-the-board, but many of the underlying data points decelerated. This included new orders (down from 25.9 to 2.1), shipments (down from 28.5 to 12.2), employment (down from 16.1 to 10.9) and the average workweek (down from 20.5 to 3.8). To illustrate the slower growth in this survey, the percentage of respondents saying that orders had increased in the month dropped from 44.8 percent in June to 30.5 percent in July, with those suggesting a decrease rising from 18.9 percent to 28.4 percent. Read More
The Empire State Manufacturing Survey reported that growth in manufacturing activity softened in July after rebounding in June. The composite index of general business conditions declined from 19.8 in June—its fastest pace since September 2014—to 9.8 in July. It was the second straight monthly expansion, but the underlying data indicated slower growth in July across the board than in the prior survey. This included new orders (down from 18.1 to 13.3), shipments (down from 22.3 to 10.5), employment (down from 7.7 to 3.9) and the average employee workweek (down from 8.5 to 0.0). More than 35 percent of respondents said that orders were higher in both June and July, but the difference maker in this month’s data was the jump in those saying sales were lower, up from 17.0 percent to 22.3 percent. Yet, even with some easing, the manufacturing sector in the New York Federal Reserve Bank’s district is stronger today than at this point last year, with modest expansions in most measures. Read More
The Census Bureau reported that new factory orders declined for the second straight month, down 0.8 percent in May, pulling back once again from March’s fastest pace since November 2014. Durable and nondurable goods orders both fell 0.8 percent in May. Yet, much of that decline for durable goods stemmed largely from sharp decreases in defense and nondefense aircraft orders, which can often be quite volatile from month to month. Excluding transportation, manufactured goods orders declined 0.3 percent, but durable goods excluding transportation increased 0.3 percent. Nonetheless, new factory orders, which have struggled mightily over the past few years, have trended largely in the right direction more recently, up 4.2 percent since May 2016. Excluding transportation, the gains were slightly larger, up 5.5 percent year-over-year. Read More
The Institute for Supply Management (ISM) reported that manufacturing activity jumped to nearly a three-year high in June. The ISM Manufacturing Purchasing Managers’ Index increased from 54.9 in May to 57.8 in June, its strongest reading since August 2014. As such, the latest survey continued to reflect healthy gains in both demand and output, with improvements in the global economy and a more upbeat outlook helping to lift manufacturing performance in the United States. It was the 10th straight month of manufacturing growth in this report.
In June, most of the key indicators rose sharply, bouncing back from some easing in the springtime months, including new orders (up from 59.5 to 63.5), production (up from 57.1 to 62.4), exports (up from 57.5 to 59.5) and employment (up from 53.5 to 57.2). The pace of hiring in June rose to a 15-month high, and growth of export orders remained encouraging, especially given the strength of the U.S. dollar and a number of global challenges over the past two years.