Global Economy, Competitiveness, Economic Environment
At a time where there is too often a commonly held belief that U.S. manufacturing is in decline and is a poor career choice, the Daniel Meckstroth Award for Excellence in Manufacturing Research aims to showcase the value and improve the competitiveness of American manufacturing through original economic research. MAPI is proud to co-present the winners, Kevin L. Kliesen and John A. Tatom, with the inaugural award for their original research titled,"Is American Manufacturing in Decline?”.
Recent turbulence in the stock market is a wake-up call to manufacturers, and to all businesses. The measurable rise in the yield on the 10-year Treasury note, now at the highest level in four years, has arguably been the primary catalyst for the equity market rout. This rise spurred to some extent by credible hints that long-dormant inflation might be on the cusp of increasing, has been a signal that financial conditions will eventually, and perhaps quickly, tighten to more normal levels.
In spite of the tumult of a reawakening global economy whose U.S. benefits were constrained by escalating political uncertainty, two destructive hurricanes, and an alarming confrontation with North Korea, U.S. manufacturing managed a rather bland but steady growth performance during 2017. The Federal Reserve reported that after two difficult years of essentially zero output gains, growth in the factory sector logged 1.3% during 2017.
In October, MAPI held its most attended webinar of the year: Transfer Pricing & Customs Valuation. In today’s cross-border business environment, transfer pricing and U.S. Customs valuation are integral, and companies must have a clear understanding of the unique requirements of each to the business.
Global Economy, Competitiveness, Government Policy
It’s a fitting time of year for miracles, and the Tax Cuts and Jobs Act, passed by Congress today fits that description. Granted, the first major tax overhaul in more than three decades is not a panacea. It’s come under an increasing amount of criticism from many factions.
See the most popular content from 2017; the impact of hurricanes on the economy, infrastructure investment, encouraging diversity and inclusion in the workforce, the impacts of the GDPR, and the new language of digital.
No one should be concerned that the Purchasing Managers’ Index (PMI) pulled back from an unrealistic 60.8% in September to a still strong 58.7% in October. The September reading from the Institute for Supply Management (ISM) has to be treated as an outlier and interpreted against the inevitable data distortions created by two devastating hurricanes. Hurricane Harvey, in particular, ravaged a manufacturing epicenter at a time when energy-related output is growing as a share of U.S. industrial output. ISM survey respondents in October noted weak business conditions and raw material shortages due to the hurricanes. The aftermath of these terrible storms is going to linger in the manufacturing picture for a while.
As has often been the case in recent years, the monthly U.S. employment report provides a glimmer of light in a gray picture. A net gain of 222,000 payroll jobs in June markedly exceeded the expectations of analysts who projected that slow economic growth would have some impact on employment gains.
I’m not sure I would call it fireworks, but the June manufacturing report from the Institute for Supply Management (ISM) certainly contains some buoyant signs for the U.S. factory sector. The overall Purchasing Mangers’ Index rose by nearly three percentage points to 57.8%, its highest level of what has been an impressive post-August 2016 run.