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manufacturing activity Archives - Shopfloor

Richmond Fed: Manufacturing Growth Stalled in May

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The Richmond Federal Reserve Bank said that manufacturing activity in its district stalled in May, pulling back for the second straight month from March’s seven-year high. The composite index of general business activity declined from 22 in March to 20 in April to 1 in May. On the positive side, it was the seventh straight monthly expansion in the mid-Atlantic region. Still, it was clear that manufacturers in the Richmond Fed region were less optimistic about current conditions in this month’s survey, including neutral growth for new orders (down from 26 to zero) and reduced activity for shipments (down from 25 to -2), capacity utilization (down from 22 to -9) and the average workweek (down from 8 to -3). Nonetheless, there was a slight pickup in hiring (up from 5 to 6). Read More

Philly Fed: Manufacturing Continues to Expand at a Robust Pace

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The Federal Reserve Bank of Philadelphia said that manufacturing activity continued to expand at a robust pace in May. The composite index of general business activity increased from 22.0 in April to 38.8 in May. February’s 43.3 figure was the highest reading since November 1983, and this latest figure was the best since then. The headline number in May was boosted by strong growth in shipments (up from 23.4 to 39.1), with the percentage of respondents suggesting that their shipments had increased rising from 38.5 percent in April to 48.4 percent in May. In addition, there were strong gains seen for new orders (down from 27.4 to 25.4), employment (down from 19.9 to 17.3) and the average workweek (up from 18.9 to 21.7), even with some easing in a couple of these measures. The rate of expansion for the average employee workweek was at a level not seen since October 1987. Read More

New York Fed: Manufacturing Activity Softened in May

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The Empire State Manufacturing Survey said that manufacturing softened in May, with activity falling for the first time since October. The composite index of general business conditions declined from 5.2 in April to -1.0 in May. The contraction in the headline number stemmed from decreases in both new orders (down from 7.0 to -4.4) and unfilled orders (down from 12.4 to -3.7), with the percentage of respondents saying that new orders were higher for the month dropping from 32.6 percent in April to 20.7 percent in May. Roughly one-quarter of those completing the survey cited declining sales in both surveys. At the same time, other measures continued to report modest growth in May, albeit with some easing in the latest results. This included shipments (down from 13.7 to 10.6), employment (down from 13.9 to 11.9) and the average workweek (down from 8.8 to 7.5).

Even with some weaker data in May, manufacturers in the New York region remained quite upbeat about the next six months. Indeed the forward-looking composite index edged down from 39.9 to 39.3, with more than half of those responding suggesting that future conditions had improved in this release. Along those lines, there were better data for expected new orders (up from 31.0 to 33.2) and shipments (up from 29.2 to 37.8), and anticipated growth in employment (down from 19.7 to 17.2), capital expenditures (down from 27.7 to 13.4) and technology spending (down from 15.3 to 13.4) remained decent despite some deceleration in May’s indices. With that said, the average workweek (down from 17.5 to 5.2) was seen notably slowing over the next six months, and pricing pressures (up from 37.2 to 38.1) are expected to remain highly elevated.

Factory Orders Rose for the Fourth Straight Month, up to the Highest Level Since November 2014

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The Census Bureau said that new factory orders increased for the fourth straight month even as its growth rate eased from 1.2 percent in February to 0.2 percent in March. With this increase, new orders were at their highest level since November 2014. Yet, much of the gain stemmed from higher defense and nondefense aircraft orders, as noted in the earlier release of preliminary durable goods figures. Excluding transportation, manufactured goods orders were down 0.3 percent, led lower by a decrease of 0.5 percent from nondurable goods firms. Durable goods orders rose by 0.9 percent, but with transportation equipment excluded, sales were essentially stagnant. Nonetheless, new factory orders – which have struggled mightily over the past couple years – have largely trended in the right direction more recently, up 5.8 percent since March 2016. Excluding transportation, the gains were slightly larger, up 6.1 percent year-over-year. Read More

Manufacturing Labor Productivity Slowed in the First Quarter

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The Bureau of Labor Statistics reported that manufacturing labor productivity rose 0.4 percent in the first quarter of 2017, slower than the 2.0 percent gain in the fourth quarter of 2016. Nonetheless, it was the second straight quarterly increase in productivity in the sector, with fourth quarter activity rebounding from declines in each of the two prior quarters. In this release, output per worker in manufacturing increased 2.8 percent, its fastest quarterly rate since the second quarter of 2014. Unit labor costs increased 2.1 percent. There were large sectoral differences in the data, with labor productivity for durable goods firms down 1.1 percent in the first quarter but up 3.2 percent for nondurable goods manufacturers. As a result, unit labor costs rose 2.5 percent and 1.3 percent for durable and nondurable goods businesses in the quarter, respectively. Read More

ISM: Manufacturing Activity Slowed in April but Continued to Expand Modestly

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The Institute for Supply Management’s (ISM) Manufacturing PMI slowed in April but continued to expand modestly. The composite index declined from 57.2 in March to 54.8 in April. As such, growth in the sector remained decent overall despite easing from February’s 2½-year high reading (57.7). Indeed, it was the eighth consecutive monthly expansion in the headline number, recognizing definite progress after two years of notable challenges in the sector. The sample comments tend to echo those improvements, citing better economic conditions and a more favorable outlook. At the same time, there were also respondents that noted some lingering headwinds and increased pricing pressures. The ISM report mostly mirrors other sentiment surveys which have observed some pullbacks from multiyear highs post-election, even as they remain mostly encouraging. Read More

Kansas City Fed: Manufacturing Activity Pulled Back in April from March’s Nearly Six-Year Highs

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The Kansas City Federal Reserve Bank reported that manufacturing activity pulled back in April from March’s levels, which were the highest since March 2011. The composite index of general business conditions declined from 20 in March to 7 in April, even as it expanded for the fifth straight month. In general, manufacturers report improvements in activity, as noted in the selected comments; yet, they also mentioned the “slow first quarter” and some lingering global headwinds. In some ways, we might have expected some easing in sentiment from the euphoric measures in the prior release. Indeed, many of the underlying data points decelerated sharply in April from those highs, including new orders (down from 32 to 8), production (down from 37 to 12), shipments (down from 35 to 11) and employment (down from 13 to 9). Two other figures were mixed. Exports picked up very slightly for the month (up from 2 to 4), whereas the average workweek narrowed for the first time since November (down from 13 to -4). Read More

Growth in New Durable Goods Orders Eased in March but Expanded for the Third Straight Month

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The Census Bureau reported that growth in new durable goods orders eased in March but expanded for the third straight month. New orders rose 0.7 percent in March, increasing from $237.1 billion to $238.7 billion, a five-month high. However, significant escalations in defense and nondefense aircraft and parts orders, which can often be quite volatile from month to month, could explain much of the gain in March. Excluding transportation, new durable goods orders declined 0.2 percent for the month, edging down from $155.7 billion to $155.4 billion. Overall, new durable goods demand has continued to trend in the right direction after stalling for much of the past few years. New durable goods orders have increased 4.5 percent since March 2016’s $228.5 billion pace. Read More

Richmond Fed: Manufacturers Report Continued Strong Growth

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The Richmond Federal Reserve Bank said that manufacturing activity in its district continued to expand strongly, even as it pulled back slightly from the fastest rate since April 2010. The composite index of general business activity declined from 22 in March to 20 in April. That was the sixth straight monthly expansion in the mid-Atlantic region. The underlying data were mixed, but still quite encouraging. New orders (unchanged at 26), shipments (up from 17 to 25) and capacity utilization (up from 21 to 22) all grew at healthy rates, with the latter two accelerating their paces for the month. Growth in demand remained at its briskest pace in seven years, which was also positive. Nonetheless, there was also some easing, mirroring the headline number, in the backlog of orders (down from 14 to 4), employment (down from 20 to 5) and average workweek (down from 21 to 8) measures. Read More

Dallas Fed: Manufacturers Continued to Express Expanding Activity

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The Dallas Federal Reserve Bank reported that manufacturing activity expanded in April for the seventh straight month, mostly sustaining the pace seen in March. The composite index of general business conditions edged down from 16.9 in March to 16.8 in April. While the headline number eased ever-so-slightly, the composite index has averaged 18.4 over the past six reports, which would indicate significant progress from contracting conditions as recently as September. 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. Nonetheless, the sample comments suggest that the improvements have not been as broad-based as we might prefer, with some firms seeing large gains in activity while others continue to struggle, at least for now. Read More