Daniel J. Meckstroth, Ph.D.
Daniel J. Meckstroth, Ph.D. |
05/01/2013 |
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The Institute for Supply Management (ISM) index was 50.7 in April, down 0.6 percentage points from 51.3 in March. Fifty percent is the dividing line between growth and decline and the larger the number the better. At 50.7, the indicator suggests that manufacturing activity is barely growing. Over the last 20 years, the ISM index has been at or below 50.7 one-third of the time.
Employment in manufacturing has come to a halt and inventory cutting...
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Daniel J. Meckstroth, Ph.D. |
04/17/2013 |
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The Federal Reserve reports that industrial production increased 0.4 percent in March. The increase was due solely to a 5.3 percent gain in utility production—both mining and manufacturing production declined. Manufacturing production fell 0.1 percent in March following a strong 0.9 percent increase in February. Within manufacturing, the weakness was widespread, and 15 of the 20 major industries had declining production. A 2.9 percent increase...
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Daniel J. Meckstroth, Ph.D. |
03/26/2013 |
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The Bureau of the Census reports that durable goods orders rose 5.7 percent in February, rebounding from a 3.8 percent decline in January. February’s durable goods report is distorted, however, by huge swings in defense orders and civilian aerospace orders. Excluding defense capital goods and civilian aerospace, both very long-lived projects, there was a much smaller 0.3 percent increase in February. Further subdividing the numbers by removing...
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Daniel J. Meckstroth, Ph.D. |
03/04/2013 |
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The Institute for Supply Management (ISM) reported that its index increased to 54.2 from 53.1 in January. A diffusion index greater than 50 indicates that manufacturing is growing. The index has been at 54.2 or higher only about one-third of the time over the last 20 years. Clearly, the ISM report for February is very favorable and suggests that manufacturing activity last month was growing at a rapid pace.
The indictors for new orders,...
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Daniel J. Meckstroth, Ph.D. |
02/27/2013 |
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The U.S. Census Bureau report on durable goods shows that new orders for durable goods fell 5.2 percent in January 2013 after posting a 3.7 percent gain in December 2012. Durable goods orders are erratic and volatile; they are a mixture of very expensive, long lead-time products and categories that are short order, so order growth by industry is important. The January report is a good example of the negative top line failing to reflect the...
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Daniel J. Meckstroth, Ph.D. |
01/02/2013 |
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The Institute for Supply Management (ISM) Index was 50.7 in December, up from 49.5 in November. Since an index level of 50 is the dividing line between growth and decline, the report on December manufacturing suggests that the sector’s activity fell in November but rose in December. Unfortunately, the up-and-down pattern in manufacturing has been a characteristic of manufacturing activity since May 2012. It is disappointing that the orders index...
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Daniel J. Meckstroth, Ph.D. |
11/26/2012 |
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The November 16 BLS release for Business Employment Dynamics sadly estimates that the number of manufacturing plants continues to decline. In the first quarter of 2012, 2.6 percent of manufacturing plants opened (8,000 plants) and 3.3 percent of manufacturing plants closed (10,000 plants).
Daniel J. Meckstroth, Ph.D. |
11/01/2012 |
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The Institute for Supply Management (ISM) index was 51.7 in October 2012, up slightly from 51.5 in September. An index above 50 signals growth and the larger the number, the faster the growth. The October ISM report provides some reassurance that manufacturing is growing again, albeit at a slow rate, and not slipping back into recession. Manufacturing activity was very much front-loaded in 2012. Manufacturing production, as measured by the...
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Daniel J. Meckstroth, Ph.D. |
10/17/2012 |
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The Federal Reserve Board reports that industrial production increased 0.4 percent in September after falling 1.4 percent in August. Mining production increased 0.9 percent and utilities increased 1.5 percent, but manufacturing production increased only 0.2 percent in September after falling a much larger 0.9 percent the prior month. Manufacturing production did increase in 12 of the 20 major manufacturing industries and was flat in two others...
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Daniel J. Meckstroth, Ph.D. |
08/24/2012 |
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The U.S. Census Bureau reported that durable goods orders for July increased 4.2 percent, after rising 1.6 percent in June. On the surface this looks like very positive results; however, there were major declines in the orders for machinery, communications equipment, and electrical equipment and appliances in June and July. The report shows that the gains over the last two months came from very large orders for civilian aircraft and parts. These...
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Daniel J. Meckstroth, Ph.D. |
07/24/2012 |
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On the surface the June durable goods figure (+1.6 percent) is strong but the underlying details reveal a fundamental weakness in business equipment orders. The business equipment sectors fell 1.4 percent in June and fell at a 3.1 percent annual rate from the first quarter to the second quarter of this year. A wave of optimism swept over the industrial sector earlier in 2012 but in its wake are concerns about the future slow pace of U.S....
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Daniel J. Meckstroth, Ph.D. |
03/19/2012 |
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The Federal Reserve reports that industrial production was unchanged in February 2012. There are, however, a lot of good news in the new report. Manufacturing production increased 0.3 percent in February. A 1.2 percent decline in mining activity and flat utility production hid a moderate gain in manufacturing in the change in total industrial production. A really positive aspect in the statistics is that the authorities increased the...
Categories: U.S. Manufacturing
Daniel J. Meckstroth, Ph.D. |
03/01/2012 |
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The Institute for Supply Management reports that their PMI index of manufacturing activity was 52.4 in February, down from 54.1 in January. An index number greater than 50 indicates that there is growth in manufacturing activity. The 20-year average for the PMI index is 52.1, so the February 2012 index, at 52.4 is at little better than average. Particularly encouraging, is the continued strong showing for manufacturing employment and export...
Categories: Economic Indicators