The Census Bureau said that new factory orders rose 2.7 percent in October, the fourth straight monthly gain and its fastest pace of monthly growth since June 2015. Yet, the jump in October came largely from a big boost in aircraft sales, with transportation equipment orders up 12.0 percent. Excluding transportation, new orders for manufactured goods increased 0.8 percent. Over the longer term, new factory orders have started to stabilize on a year-over-year basis, up 1.3 percent since October 2015 but improving from a negative year-over-year position in August. Nonetheless, new orders for manufacturing goods excluding transportation have risen just 0.5 percent over the past 12 months. This suggests still-soft demand in the broader manufacturing sector, even as this was the first positive year-over-year reading since October 2014. Read More
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) rebounded once again in November, growing at a five-month high. The composite index rose from 51.9 in October to 53.2 in November, expanding for the third straight month. This is encouraging for a sector that has seen subpar growth over much of the past two years on global headwinds and economic anxieties. Indeed, manufacturing production (up from 54.6 to 56.0) in November expanded at its fastest clip since July 2015, with new orders (up from 52.1 to 53.0) also accelerating slightly. Exports (down from 52.5 to 52.0) and employment (down from 52.9 to 52.3) slowed a little for the month but remained positive, with hiring expanding for only the third time this year so far.
Overall, manufacturers appear to be more upbeat in their assessments of the economy and about demand. The sample comments tend to echo this. One computer and electronic products leader reported, “Strong manufacturing numbers in anticipation of strong year-end bookings.” Other comments also mirrored that positive trend, describing activity as “steady” or “consistent” or “good.” Read More
The Census Bureau said that new durable goods orders jumped 4.8 percent in October. New orders rose from an upwardly revised $228.4 billion in September to $239.4 billion in October. On a year-over-year basis, sales have increased 2.1 percent since October 2015, up from $234.5 billion. However, the data have been skewed by volatility in the transportation equipment segment. In October, transportation equipment orders soared 12.0 percent higher on strong sales for defense and nondefense aircraft and parts. Excluding transportation, new orders for durable goods increased 1.0 percent in October, but over the past 12 months, growth in activity has been more minimal, up just 0.3 percent.
Therefore, even with the healthy gains in demand seen in October, new orders growth for durable goods continue to be quite weak on a year-over-year basis, highlighting lingering challenges in the sector. Along those lines, core capital goods orders (or nondefense capital goods excluding aircraft) increased 0.4 percent in October, but have fallen 4.0 percent over the past 12 months. Read More
The Richmond Federal Reserve Bank said that manufacturing activity in its district rebounded modestly in November after contracting in four of the prior five months. The composite index of general business activity increased from -4 in October to 4 in November. The shift in this month’s report came largely from better new orders (up from -12 to 7) data, with shipments (down from 2 to 1) also expanding ever-so-slightly. At the same time, there are lingering weaknesses seen in indices for the backlog of orders (down from -11 to -12) and capacity utilization (up from -5 to -1). Beyond those measures, the labor market data were promising. Hiring (up from 3 to 5) accelerated for the second consecutive month, and the average workweek (up from -3 to 4) widened again. Read More
The Kansas City Federal Reserve Bank said that manufacturing activity slowed in November but continued to expand ever-so-slightly. The composite index of general business conditions declined from 6 in October to 1 in November; yet, it was also the third straight month with this measure positive after two years of struggles. Indeed, manufacturers in the district have faced tremendous challenges due to global headwinds and reduced commodity prices, especially for crude oil. The underlying data in November mirrored the headline figure, with easing expansions for new orders (down from 14 to 6), production (down from 18 to 9) and shipments (down from 20 to 7). Export growth (down from 3 to zero) was stagnant in November after slightly improving in October for the first time since January. Read More
The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded for the fifth time in the past six months. The composite index of general business activity declined from 9.7 in October to 7.6 in November. This marks notable improvement for manufacturers after weaknesses last year and in the spring months. Despite the easing in this month’s headline number, both new orders (up from 16.3 to 18.6) and shipments (up from 15.3 to 19.5) were higher in November. The percentage of respondents saying that new orders were lower for the month declined from 24.1 percent in October to 17.7 percent in November, with the largest shift among those saying that there was no change in sales, up from 33.7 percent to 45.9 percent. Read More
The Empire State Manufacturing Survey said that manufacturing activity expanded somewhat in November, rebounding after three straight months of declines. The composite index of general business conditions increased from -6.8 in October to 1.5 in November. The stabilization in activity in the New York Federal Reserve Bank’s district stemmed from improvements in new orders (up from -5.6 to 3.1) and shipments (up from -0.6 to 8.5). Nearly one-third of respondents reported higher sales in November, up from 26.7 percent in October. That was an encouraging sign for a sector that has been significantly challenged over the past two years. Yet, it was not all good news. Employment continued to lag behind, with indices for the number of employees (down from -4.7 to -10.9) and the average employee workweek (down from -10.4 to -10.9) still in strong contraction territory. That suggests that firms remain quite cautious for now, even with better demand figures. Read More
The Census Bureau said that new factory orders rose 0.3 percent in September, slowing slightly from the 0.4 percent gain seen in August. These data were pulled somewhat lower by a sharp decline in defense aircraft and parts, with transportation equipment orders down 1.1 percent. Excluding transportation, new orders for manufactured goods increased 0.6 percent. Over the longer term, new factory orders have been quite soft over the past 12 months, up 0.6 percent since September 2015 or down 0.1 percent year-over-year with transportation excluded. This suggests broader weaknesses for manufacturers in terms of demand, perhaps highlighting why business leaders in the sector continue to be so cautious. Read More
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) continued to expand modestly in October, sustaining the rebound seen in September. The composite index edged up from 51.5 in September to 51.9 in October, growing for the second straight month. Overall, this is encouraging for a sector that has seen subpar growth over much of the past two years on global headwinds and economic anxieties. On the positive side, production (up from 52.8 to 54.6) and exports (up from 52.0 to 52.5) both accelerated in October, and employment (up from 49.7 to 52.9) expanded for only the second time year-to-date. Manufacturers have been rather cautious so far in 2016, with hiring pulling back. Hopefully, better hiring data will follow stronger demand and output figures moving forward. Read More
The Dallas Federal Reserve Bank reported that manufacturing activity grew slightly in October even as sentiment remained negative. The composite index of general business conditions increased from -3.7 in September to -1.5 in October, bringing it closer to neutral territory but contracting for the 22nd straight month. At the same time, the underlying data were mixed. Production (down from 16.7 to 6.7), shipments (down from 20.1 to 1.9), capacity utilization (down from 13.5 to 0.8) and employment (down from 2.3 to 0.2) each expanded in October, albeit at a slower pace. Indeed, hiring growth was essentially stagnant, but marginally positive. On the other hand, capital expenditures (up from 3.1 to 8.7) accelerated in this report. Read More