U.S. Manufacturing: 9 quarters of growth

Discussion in 'Politics & Religion' started by Ricter, Jan 17, 2012.

  1. Ricter


    "U.S. Manufacturers Expect Modest Growth in First Half
    (Journal of Commerce Online – William B. Cassidy)

    "Manufacturing growth won't be as robust as it was in 2011, MAPI says

    "U.S. manufacturing is expected to continue growing but at a more moderate pace during the first half of 2012, according to a quarterly survey by the Manufacturers Alliance for Productivity and Innovation.

    "The survey’s composite index slipped to 66 in December from 67 in the previous report in September but remained above 50, the threshold between contraction and expansion, for the ninth consecutive quarter. The index, conducted quarterly since 1991, peaked at 81 in June 2010.

    “Despite the challenges posed by slower economic growth and continued problems in the construction and financial sectors, the manufacturing sector is the Energizer Bunny of the U.S. economy,” said Donald A. Norman, MAPI economist and survey coordinator. “Barring a meltdown in the Eurozone, the U.S. manufacturing sector should continue growing at a moderate pace heading into 2012.”

    "MAPI’s composite business outlook index is a weighted sum of the U.S. shipments, backlog orders, inventory and profit margin indexes. The six indexes of current business conditions showed declines but remain relatively healthy.

    "The index comparing year-over-year expectations on orders fell to 70 in December from 79 in the September survey. Declines also were posted in indexes for export orders (71 from 80 in September), backlog orders (67 from 73), inventories (73 from 74), profit margins, (70 from 74).

    "The capacity utilization index showed 38.1% of firms were operating above 85% capacity. That was down from 43.3% in September but above the long-term average of 32%.

    "Forward-looking indexes showed optimism about expected increases in orders for the coming year (86 from 84 in September), prospective first-quarter shipments (83 from 81), and research and development spending (77 from 76).

    "Declining forward-looking indexes were for shipments by non-U.S. affiliates (71 from 85 in September, and U.S. investment (73 from 81). The survey’s gauge of sentiment that longer-term interest rates will rise by the end of the first quarter rose to 63 from 48."

    And the Empire State manufacturing index:

    "Empire State factory index hits 13.5 in January
    Data show highest reading since April

    By Greg Robb, MarketWatch

    WASHINGTON (MarketWatch) — Manufacturing activity in the New York area expanded at the fastest rate in nine months in January, the New York Federal Reserve Bank said Tuesday.

    "The bank’s Empire State Manufacturing index rose to 13.5 in January from a revised 8.2 in December. The index has been on a strong upward trend after remaining stuck below zero from June through October.

    "The size of the increase was unexpected. Economists were expecting the index to rise to 11.3 from the initial December reading of 9.5.

    "Economists said the report fit into a pattern of steady improvement seen in factory surveys in recent months.

    “The [manufacturing] sector looks to have regained its footing and activity is accelerating,” said Thomas Simons, economist at Jefferies & Co. Inc., in a research note.

    "Stocks opened up strongly after the Empire report was released. The Dow Jones Industrial Average DJIA +0.50% was recently up 147 points to 12,570.

    "Some economists were cautious about the report, noting that U.S. factory activity could slow if the global economy falters.

    "Steven Ricchiuto, chief economist at Mizuho Securities USA, said that the increase could be the result of “an aggressive auto industry plan” which is likely to be reduced as the first quarter continues.

    "Still, manufacturers appeared to be optimistic. A reading of expected conditions in the next six months climbed sharply in January to 54.9, its highest reading in a year.

    "In a special survey question, 51% of manufacturers said they expect to hire workers over the next six to twelve months. Only 9% predicted a decline in the total number of workers. Read the full New York Fed survey.

    "The underlying details of the report were strong.

    "The new orders index rose to 13.7 in January from 6.0 in December."

    Good news indeed.
  2. 377OHMS


    I read that as well. Good news with a caveat.

    So many people cannot find salaried positions in their chosen line of work that many are starting businesses. Many of those new businesses are manufacturing but they certainly aren't around here (SoCal).
  3. Ricter


    Very true. That's what we want, right? But will these startups show up on the major indices?

    But you point to a more fundamental problem: it's clear the economy can function (if weakly), even grow (if slowly), without everyone participating. To some degree we appear to be achieving the fantastical notion that our machines will relieve us of work. The system of ownership, though, hasn't changed, so the prime beneficiaries of this are the owners of the robots (this includes software, a kind of robot if you think about it).
  4. The trend is reversing according to just about every measure in that article you copy and pasted. Basically, production ramped up due to alot of "false positive's" that the QE's were signalling from 2009-11.

    And the "barring a meltdown in the Eurozone" is cute.