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 Census Bureau said that new durable goods orders continue to disappoint in September. New orders were off 0.1 percent, edging down from $227.6 billion to $227.3 billion. On a year-over-year basis, sales have increased 1.6 percent since September 2015, up from $223.7 billion. However, these data have been skewed by volatility in the transportation equipment segment. In September, transportation equipment orders fell 0.8 percent, largely on reduced activity for defense aircraft and parts. Excluding transportation, new orders for durable goods were up 0.2 percent in September, but over the past 12 months, they were essentially unchanged, down 0.04 percent.
As such, the broader demand for durable goods over the past year remained weak, highlighting ongoing challenges in the sector. Along those lines, core capital goods orders (or nondefense capital goods excluding aircraft) declined 1.2 percent in September, with a year-over-year decrease of 4.1 percent. Read More
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) unexpectedly contracted in August for the first time since February. The composite index dropped from 52.6 in July to 49.4 in August. A couple of the sample responses cited a “flat” business environment for the month. Indeed, new orders (down from 56.9 to 49.1) and production (down from 55.4 to 49.6) both shifted from decent growth in July to decreased activity in August, with employment (down from 49.4 to 48.3) remaining in negative territory for the second straight month.
Overall, this is a disappointing result, as it temporary suspends the narrative that manufacturing was beginning to stabilize after weaknesses seen earlier in the year. Yet, more than anything, this report shows that the sector’s challenges continue to linger even as other data have been more promising. One positive take way was exports (unchanged at 52.5), which have expanded now for six straight months. Read More
The Census Bureau said that new durable goods orders increased 3.4 percent in April, extending the 1.9 percent gain seen in March. Sales of new durable goods orders rose from $228.3 billion in March to $235.9 billion in April. Demand have risen in three of the four months so far in 2016, providing some encouragement for a sector that has experienced its share of softness over the past year. On a year-over-year basis, sales have risen from $231.5 billion in April 2015, an increase of 1.9 percent. Yet, much of that gain came from transportation equipment, particularly aircraft sales. Excluding transportation, new orders for durable goods increased by just 0.4 percent, and over the past 12 months, that figure was down 1.4 percent. This suggests that demand remains somewhat weaker than the headline number would seem to indicate – a sign that durable goods manufacturers continue to be challenged beyond automobiles and aircraft. Read More
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
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
U.S. manufacturing activity grew at the slowest pace since September 2009, according to preliminary figures from Markit. The Markit Flash U.S. Manufacturing PMI decreased from 51.5 in March to 50.8 in April. In general, the strong dollar and weaknesses abroad have dampened international demand and overall sentiment over the course of the past year. Manufacturing activity has decelerated significantly over the past 12 months, with the main PMI number down from 54.2 in April 2015. In this report, output (down from 51.4 to 50.3) and hiring (down from 52.1 to 50.2) each pulled back to a near-standstill, with exports (down from 50.0 to 48.5) contracting for the second time in the past three months. On the other hand, new orders (down from 52.8 to 52.0) continued to expand modestly, but with some easing for the month.
As such, this report stands in sharp contrast to the better-than-expected sentiment seen in the competing data from the Institute for Supply Management (ISM). In that release, new orders and output each grew surprisingly strong in March, lifting its manufacturing PMI value above 50 for the first time since August. It provided some encouragement after months of softness, even as other economic data – including this one from Markit – continue to suggest ongoing challenges. Read More
U.S. manufacturing activity remained “subdued” despite picking up a little in March, according to the latest figures from Markit. The Markit Flash U.S. Manufacturing PMI increased from 51.3 in February, its slowest pace in more than three years, to 51.4 in March. This suggests that manufacturing in the U.S. remains challenged despite some signs of progress, including accelerated growth for new orders (up from 51.7 to 52.8), output (up from 51.3 to 51.4) and hiring (up from 51.5 to 52.1). The pickup in demand is notable, even as the sales expanded at a much faster pace at this point last year, when the index for new orders stood at 56.4. On the other hand, exports (up from 49.1 to 50.0) were stagnant in March, stabilizing a bit after contracting in February. In general, the strong dollar and weaknesses abroad have dampened international demand and overall sentiment over the course of the past year, with the export index averaging 50.2 over the past 15 months. Read More
The Institute for Supply Management (ISM) said that manufacturing activity has now contracted for five straight months. The manufacturing purchasing managers’ index increased from 48.2 in January to 49.5 in February but remained below the important threshold of 50 which would indicate the start of expansion. In that regard, this report continued to show weaker-than-desired data for manufacturers, with the sector challenged by global headwinds and reduced commodity prices. Indeed, exports (down from 47.0 to 46.5) remained in contraction territory, hurt by the strong dollar and economic softness for manufacturing goods to key markets.
Yet, this latest release also offered some signs of encouragement. For one thing, the headline index was higher than the consensus expectation of roughly 48.5, indicating that respondents were perhaps less downbeat than predicted. At the same time, some of the underlying data reflect stabilization in activity from prior months. For instance, new orders (unchanged at 51.5) and production (up from 50.2 to 52.8) have now expanded for two consecutive months, with the latter growing at its fastest pace since August. Moreover, the pace of decline for hiring (up from 45.9 to 48.5) slowed in February, and pricing pressures (up from 33.5 to 38.5) remain virtually nonexistent.
This does not mean that manufacturing’s struggles are over, but this report does offer a glimpse of cautious optimism, with the ISM data coming in a bit stronger than anticipated. Even with this finding, manufacturers remain anxious in their economic outlook overall, and other reports continue to highlight softness in the marketplace. With that in mind, manufacturing leaders remain focused on implementing pro-manufacturing policies, including those outlined in the NAM’s “Competing to Win” document in this all-important election year and beyond.