Members:

Here is the Monday Manufacturing Economy Report NAM Chief Economist Chad Moutray f or 9/10/2018. The Council of Industry, as member organization of the National Association of Manufacturers is happy to share this report with our members. 

Here are some highlights from the report:

" The Institute for Supply Management Manufacturing Purchasing Managers’ Index jumped from 58.1 in July to 61.3 in August, the best rate since May 2004, with solid growth in demand, output and hiring. Index readings greater than 50 indicate positive expansions in activity for the month on net, with data points greater than 60 consistent with very healthy gains. The index for new orders has now been 60 or greater for 16 straight months, which is encouraging, especially with sales being a proxy of future production activity. With ever-stronger economic growth, manufacturers report highly elevated pricing pressures. Prices for raw materials have pulled back from a seven-year high in May but continue to signal robust gains in costs. More than half of manufacturing respondents said their costs had risen in August, with just 6.8 percent suggesting they decreased.
While new factory orders fell 0.8 percent in July, most of the decrease stemmed from a decline in aircraft orders, which can be volatile from month to month. The June data were skewed higher by sales made at the Paris Air Show, for instance. Excluding transportation, new orders for manufactured goods edged up 0.2 percent in July. Overall, new factory orders have trended sharply higher over the past year. Along those lines, sales of manufactured goods have soared 9.0 percent since July 2017. Encouragingly, core capital goods—or nondefense capital goods excluding aircraft—rose 1.6 percent in July. These can be a proxy for capital spending in the U.S. economy, and as such, this suggests that capital investments have increased at a relatively healthy pace. Much like the headline numbers, there was a very solid gain of 8.8 percent over the past 12 months.
Despite the mostly positive manufacturing news last week, the latest monthly jobs data provided a bit of a letdown. Manufacturers lost 3,000 workers in August, the first decline in 13 months. Moreover, the robust gains of 33,000 and 37,000 in June and July were both revised lower, down to 21,000 and 18,000. Even with these pullbacks, the data reflect continued strength in the labor market, with the sector adding 254,000 workers over the past 12 months, or an average of 21,167 per month. That is consistent with healthy growth in the manufacturing sector, as described above. Since the end of the Great Recession, manufacturing employment has risen by 1,264,000 workers, with 12,717,000 employees currently in the sector. Turning to income growth, average weekly earnings for manufacturing rose from $1,107.82 in July to $1,110.28 in August, up 2.3 percent from $1,085.28 in August 2017."   Read Chad Moutray's Full Report Here.


Harold King
Executive Vice President
The Council of Industry
6 Albany Post Road
Newburgh, NY 12550
845-565-1355
hking@councilofindustry.org