Tag

manufacturing activity

ISM

ISM: Manufacturing Activity Expanded for Second Straight Month, Slowing a Little in April

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The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) expanded for the second straight month, albeit at a slower pace in April. The composite index declined from 51.8 in March to 50.8 in April, but even with the decrease, this represented progress in the manufacturing sector after contracting for five consecutive months from October through February. New orders (down from 58.3 to 55.8) and production (down from 55.3 to 54.2) each grew at decent rates for the month despite some easing in this release, and exports (up from 52.0 to 52.5) accelerated, increasing for only the third time in the last 12 months.

Last month’s release helped to fuel the narrative that manufacturing activity was starting to stabilize, and the current data mostly support that view. At the same time, though, manufacturers remain challenged by global headwinds and still-low commodity prices, and a number of economic indicators have been disappointing, highlighting the fact that business’ struggles are still far from over. The sample comments tended to echo this nuanced view of modest improvements, with some respondents noting a pickup in sales while others cited ongoing sluggishness. One’s perspective was likely industry-specific. Read More

regional Fed

Kansas City Fed: Manufacturing Activity Continued to Decline in April, but the Outlook Improved

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The Kansas City Federal Reserve Bank said that manufacturing activity continued to decline in April, contracting for the 14th straight month. Reduced crude oil prices, the strong dollar and weaknesses abroad have pressured the sector’s performance, especially since the district includes energy-intensive Oklahoma. With that said, the pace of decline slowed for production (up from -14 to -8), shipments (up from -15 to -6), exports (up from -10 to -4) and the average workweek (up from -10 to -6). New orders remained slightly negative (unchanged at -2), and hiring continued to lag behind (unchanged at -12). Despite the negative seasonally-adjusted figure, one-third of respondents had increased new orders for the month, with 29 percent citing declines.

Meanwhile, the forward-looking data composite index returned to positive territory, up from -2 in March to 10 in April, its highest level in 14 months. Indeed, manufacturers in the Kansas City Fed’s district appeared to be more upbeat in April, with greatly-improved assessments for future orders (up from zero to 20), production (up from 5 to 25) and shipments (up from 5 to 27). More than 40 percent of those completing the survey expected increases in each of those three activities over the next six months. In addition, more respondents expect increased employment (up from 1 to 8) and a longer average workweek (up from 3 to 8), with modest gains seen in the labor market. Nonetheless, it was not all good news. Exports (up from zero to 1) were anticipated to remain marginally positive over the coming months, and capital expenditures (up from -9 to -6) were expected to continue to contract.

Richmond Fed: Manufacturing Activity Expanded for the Second Straight Month in April

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The Richmond Federal Reserve Bank said that manufacturing activity expanded for the second straight month in April. The composite index of general business activity declined from 22 in March to 14 in April. More importantly, the relatively strong data seen in this report are consistent with some stabilization in activity following significant softness over the course of the past year. For instance, new orders (down from 24 to 18) and shipments (down from 27 to 14) each expanded strongly in April despite some easing in the pace of growth in this latest report. Capacity utilization (up from 17 to 18) accelerated slightly in April, its highest point since December 2010. In addition, the labor market variables continued to grow modestly, with some pullback for the month, including hiring (down from 11 to 8) and the average workweek (down from 16 to 9). Read More

durable goods

New Durable Goods Sales Rebounded Somewhat in March, but Weaker Than Expected

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The Census Bureau said that new durable goods orders increased by 0.8 percent in March, rebounding somewhat after the 3.1 percent decline seen in February. This was weaker-than-expected, with a consensus expecting a gain of 1.8 percent. Sales of new durable goods orders rose from $228.9 billion in February to $230.7 billion in March. Overall, demand remains quite soft, with the sector challenged by global headwinds and lingering anxieties in the economic outlook. Order volumes have been highly volatile from month-to-month over the course of the past year, with sales trending lower since peaking in 2015 at $241.0 billion in July. On a year-over-year basis, new durable goods orders have fallen 2.5 percent, down from $236.7 billion in March 2015. Even with transportation equipment sales excluded, year-over-year growth declined by 1.4 percent, with orders down 0.2 percent for the month, highlighting the broad-based softness of demand for durable goods over the past 12 months. Read More

Philly Fed: Manufacturing Activity Declined Again in April after Rebounding in March

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The Federal Reserve Bank of Philadelphia said that manufacturing activity declined again after rebounding in March. The composite index of general business activity fell from 12.4 in March to -1.6 in April. As such, the headline number has now been negative in seven of the past eight months, suggesting that manufacturers continue to struggle from recent economic weaknesses. In April, that was most evident in the new orders (down from 15.7 to zero) and shipments (down from 22.1 to -10.8) data, with demand stagnating and shipments plunging. Indeed, the percentage of respondents saying that their orders had increased in the month decreased from 36.7 percent in March to 22.9 percent in April, illustrating the shift in this month’s report. Read More

Kansas City Fed: Manufacturing Activity Has Declined for 13 Straight Months

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The Kansas City Federal Reserve Bank said that manufacturing activity in its district has declined for 13 straight months. Still, the composite index of general business conditions increased from -12 in February to -6 in March, its best reading (albeit negative) since November. Reduced crude oil prices, the strong dollar and weaknesses abroad have pressured the sector’s performance, especially since the district includes energy-intensive Oklahoma. The slight improvement in the overall pace of decline in March reflected some stabilization for new orders (up from -15 to -2). Along those lines, the percentage of respondents saying that their new orders had increased for the month rose from 18 percent in February to 32 percent in March, which was somewhat encouraging.

Yet, other measures pulled back in March, indicating that manufacturers in the region remain highly challenged. This included production (down from -8 to -14), shipments (down from -11 to -15) and exports (down from -6 to -10). The labor market data eased marginally in their rate of growth for the month, but the pace of decline for hiring (up from -20 to -12) and the average workweek (up from -14 to -13) indicated that employment growth remained a significant problem. Looking at all of the current data, it should not be a surprise that manufacturers in the region remained anxious. Read More

durable goods

New Durable Goods Pulled Back Again in February after Rebounding Somewhat in January

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The Census Bureau said that new durable goods orders pulled back again in February after rebounding somewhat in January. Sales of new durable goods declined from $235.9 billion in January to $229.4 billion in February, a decrease of 2.8 percent. Overall, demand remains quite soft, with the sector challenged by global headwinds and lingering anxieties in the economic outlook. Order volumes have been highly volatile from month-to-month over the course of the past year, with sales trending lower since peaking in 2015 at $241.0 billion in July. Despite that steep decline over the past 7 months, year-over-year growth for new durable goods orders was 1.8 percent, up from $225.3 billion in February 2015. Still, much of that growth stemmed from transportation equipment (up 7.1 percent year-over-year). Excluding transportation, year-over-year growth would have been down 0.5 percent. Read More

regional Fed

Richmond Fed: Manufacturing Activity Rebounded in March

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The Richmond Federal Reserve Bank reported rebounding manufacturing activity in March, much like was reported in similar surveys from its regional peers in New York and Philadelphia. The composite index of general business activity jumped from -4 in February to 22 in March, its highest monthly gain in nearly six years. After contracting in February, new orders (up from -6 to 24), shipments (up from -11 to 27) and capacity utilization (up from -5 to 17) each expanded strongly in March. Hiring (up from 9 to 11) and the average workweek (up from 5 to 16) also improved for the month. As such, this report was reassuring, offering a sign that manufacturing in the district was beginning to stabilize after months of weakness due to global headwinds. Read More

Philly Fed: Manufacturing Activity Rebounded Following Six Straight Months of Contraction

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The Federal Reserve Bank of Philadelphia said that manufacturing activity rebounded in March following six straight months of contraction. The composite index of general business activity rose from -2.8 in February to 12.4 in March. This was an encouraging sign that manufacturers were starting to see some improvements in activity after months of weakness. Along those lines, new orders (up from -5.3 to 15.7) and shipments (up from 2.5 to 22.1) were each up strongly in March. Indeed, 36.7 percent of respondents in this survey reported increased sales in March, up from 28.3 percent in February, and the percentage citing declining orders dropped from 33.6 percent to 21.0 percent. Read More

NY Fed: Manufacturing Activity Expanded Slightly for the First Time since July

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The Empire State Manufacturing Survey stabilized in March, with the headline index expanding for the first time since July. The composite index of general business conditions increased from -16.6 in February to 0.6 in March. This suggests that manufacturing activity has stabilized in the district, albeit with lingering challenges. New orders (up from –11.6 to 9.6) and shipments (up from -11.6 to 13.9) both shifted into positive territory in March, with modest growth after several months of declines. The percentage of respondents suggesting that their sales had risen for the month rose from 22.5 percent in February to 34.9 percent in March. Still, one-quarter of those completing the survey noted declining new orders in March, with 39.8 percent observing no change. Read More