The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded in February at its strongest rate since November 1983. The composite index of general business activity rose from 23.6 in January to 43.3 in February, with 48.2 percent of survey respondents suggesting that conditions had improved this month. Just 4.8 percent said that conditions had worsened. Other measures were also uplifting, including new orders (up from 26.0 to 38.0), shipments (up from 20.5 to 28.6) and the average employee workweek (up from 6.8 to 13.6). Growth in hiring (down from 12.8 to 11.1) continued to expand modestly despite some easing in the current release. Read More
The Empire State Manufacturing Survey said that manufacturing activity expanded at the fastest pace since September 2014, rising for the fourth straight month in February. The composite index of general business conditions jumped from 6.5 in January to 18.7 in February, with nearly one-third reporting a better environment today than last month. There were also notable improvements in new orders (up from 3.1 to 13.5) and shipments (up from 7.3 to 18.2). Indeed, the percentage of respondents saying that their sales were higher rose from 29.1 percent to 36.3 percent in this survey.
While other measures had made progress in recent months, employment had lagged behind. In this release, however, that started to change. Indices for the number of employees (up from -1.7 to 2.0) and the average workweek (up from -4.2 to 4.1) each shifted into positive territory, with hiring expanding for the first time since May 2016. Hopefully, we will continue seeing stronger labor market data in the coming months, particularly if demand remains strong. Read More
The Institute for Supply Management’s (ISM) Manufacturing PMI continued to grow rather strongly, accelerating to its fastest pace since November 2014. The composite index rose from 54.5 in December to 56.0 in January, and it marked the fifth straight monthly expansion in the headline number. New orders (up from 60.3 to 60.4) and production (up from 59.4 to 61.4) expanded strongly in January. Along those lines, the sample comments all point to healthier conditions and stronger demand in the manufacturing sector, which is very encouraging. In addition, employment also picked up the pace (up from 52.8 to 56.1), suggesting that manufacturers have begun to move past the more cautious approach to hiring seen just a few months ago. Read More
The Dallas Federal Reserve Bank reported that manufacturing activity expanded in January at its fastest rate since April 2010. The composite index of general business conditions increased from 17.7 in December to 22.1 in January, expanding for the fourth consecutive month after contracting for 21 straight months. The recent gains in business confidence can largely be attributed to better energy commodity prices and from a post-election boost in optimism, especially as it relates to expectations regarding pro-growth policies. Along those lines, key measures of activity were mostly higher in January, including new orders (up from 10.1 to 15.7), shipments (up from 5.8 to 15.8), employment (up from -3.4 to 6.1), hours worked (up from 3.1 to 9.1) and capital expenditures (up from 6.7 to 16.3). In addition, production (down from 14.8 to 11.9) and capacity utilization (down from 15.6 to 9.1) have also notched improvements in recent months despite some easing in the latest data.
Moving forward, manufacturing leaders were very positive about the next six months. The forward-looking measure jumped from 42.5 to 43.7, a level not seen in just over 12 years (December 2004). Indeed, nearly 62 percent of respondents expect increased levels of production and new orders in the months ahead, with 46.4 percent and 35.2 percent predicting higher employment and capital spending, respectively.
The Census Bureau said that new durable goods orders declined 0.4 percent in December. New orders decreased from $228.0 billion in November to $227.0 billion in December. However, these data have been skewed by volatility in the transportation equipment segment. Defense aircraft and parts orders plummeted 63.9 percent in December after soaring by 99.1 percent in November. Excluding transportation, new orders for durable goods were up 0.5 percent, rising from $152.6 billion to $153.4 billion, its fastest pace since October 2014. In general, these data reflect better performance after the sector has struggled mightily over the past two years on global challenges. On a year-over-year basis, new durable goods orders have risen 1.6 percent, with 3.5 percent growth since December 2015 excluding transportation equipment. Read More
The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded at its fastest pace in 26 months, continuing to accelerate as we begin 2017. The composite index of general business activity rose from 19.7 in December to 23.6 in January, its highest level since November 2014. In addition, sentiment has now expanded for six consecutive months, improving from broad-based weaknesses in late 2015 and early 2016. Growth in new orders (up from 14.9 to 26.0) also rose strongly, with 41.4 percent of respondents noting increased sales for the month, up from 31.6 percent in the prior release. At the same time, shipments (down from 21.7 to 20.5) and hiring (up from 3.6 to 12.8) were also encouraging, albeit with a slight easing in the former. Read More
The Census Bureau said that private manufacturing construction spending remained weak in November, falling to an 11-month low. The value of construction put in place in the sector declined from $73.53 billion in October to $72.71 billion in November, down 1.1 percent for the month. While manufacturing construction has largely trended higher over the past few years, activity has stalled more recently as the sector has grappled with sluggish growth and economic and political anxieties. Along those lines, construction activity in the manufacturing sector has pulled sharply lower since achieving the all-time high of $82.15 billion in September 2015. Over the past 12 months, manufacturing construction spending has fallen 8.0 percent. Read More
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) accelerated to a two-year high in December. The composite index rose from 53.2 in November to 54.7 in December, its highest level since December 2014. It was the second consecutive increase in the headline number, mirroring the jump in business confidence seen in other economic indicators since the election. Indeed, all of the sample comments provided by the ISM echoed the improvement in activity and outlook, with the comments of one plastics of rubber products manufacturer summing up the thoughts of many: “Our business remains strong, and we are seeing continued growth.” Along those lines, respondents also cited a tight labor market and a pickup in inflationary pressures, both of which would also be consistent with stronger demand and output.
Looking more closely at the data, the underlying figures were encouraging in December, including very healthy gains for new orders (up from 53.0 to 60.2) and production (up from 56.0 to 60.3). It was the first time both of these measures have exceeded 60—signifying strong expansions—in 25 months, or since November 2014. Growth in export sales (up from 52.0 to 56.0) and employment (up from 52.3 to 53.1) also improved for the month. Read More
The Federal Reserve Bank of Philadelphia reported that manufacturing activity expanded at its fastest pace in 25 months, expressing post-election optimism in its latest survey. The composite index of general business activity soared from 7.6 in November to 21.5 in December, its highest level since November 2014. In addition, sentiment has now expanded for five consecutive months, improving from weaker data earlier in the year. With that said, the underlying data were mixed, but still encouraging. Growth in new orders eased somewhat (down from 18.6 to 13.9), whereas shipments accelerated (up from 19.5 to 22.0), with both variables expressing relatively strong expansions. Read More
The Empire State Manufacturing Survey said that manufacturing activity grew at its fastest pace in eight months in December, expanding for the second straight month. The composite index of general business conditions increased from 1.5 in November to 9.0 in December. As such, sentiment among manufacturers in the New York Federal Reserve Bank’s district has jumped post-election, expanding modestly and improving from weaknesses seen in the autumn months. This can be seen in some of the underlying data points, as well, especially new orders (up from 3.1 to 11.4). Indeed, the percentage of respondents suggesting that their sales rose in the month increased from 29.4 percent in November to 38.5 percent in December. Shipments (unchanged at 8.5) figures were also encouraging. Read More