Last updateFri, 01 Jul 2016 3pm


ISM: Manufacturing Activity Expanded in June

Manufacturing expanded in June as the PMI registered 53.2%, an increase of 1.9% from the May reading of 51.3%, indicating growth in manufacturing for the fourth consecutive month, and is the highest reading since February 2015 when the PMI registered 53.3%.

Of the 18 manufacturing industries measured by the Institute for Supply Management (ISM), 13 are reporting growth in June. The three industries reporting contraction in June are: electrical equipment, appliances & components; transportation equipment; and plastics & rubber products. 

NAM Reacts to Trump’s Anti-Trade Comments

GOP presidential candidate Donald Trump, speaking Tuesday near Pittsburgh, expressed fierce opposition to free-trade agreements and criticized Hillary Clinton for supporting them. Trump blamed Clinton and her husband for the loss of millions of manufacturing jobs and threatened to pull the U.S. out of NAFTA “and vowed to withdraw” from the Trans-Pacific Partnership (TPP), the Associated Press writes.

National Association of Manufacturers (NAM) president Jay Timmons responded directly to Trump on twitter, saying “you have it backward. Trade is GOOD for #mfg workers & #jobs. Let’s #MakeAmericaTradeAgain.” and “@realDonaldTrump should understand 40% of manufacturing jobs are related to exports. We need more exports– not less.”

Consumer Confidence Climbs to 8-Month High

The Conference Board Consumer Confidence Index, which had decreased in May, improved in June. The Index now stands at 98.0, up from 92.4 in May. Those stating business conditions are “good” increased slightly from 26.1% to 26.9%, while those saying business conditions are “bad” decreased from 21.4% to 17.7%.

“Consumers were less negative about current business and labor market conditions, but only moderately more positive, suggesting no deterioration in economic conditions, but no strengthening either. Expectations regarding business and labor market conditions, as well as personal income prospects, improved moderately. Overall, consumers remain cautiously optimistic about economic growth in the short-term,” said Lynn Franco, director of economic indicators at The Conference Board. 

How Will Brexit Affect the Manufacturing Industry?

The day after the Brexit decision, National Association of Manufacturers (NAM) chief economist Chad Moutray addressed the UK vote to leave the EU and its effect on the manufacturing industry as well as the element of uncertainty it adds to the global marketplace.

According to Moutray, “If you are a manufacturer making hiring and capital spending plans, there is a lot to be worried about globally.” Europe is a “key market” for U.S. manufacturers, and the UK is “our fifth largest trading partner ($48.6 billion), with Germany at number six ($44.6 billion).”

Moutray expects growth to “suffer, at least in the short time, particularly as consumers and businesses grapple with the uncharted nature of the result.” Nevertheless, Moutray remains “skeptical, at least for now,” that Brexit will push the UK into a recession. 

U..S. Durable Goods Orders Down 2.2% in May

New orders for manufactured durable goods in May decreased $5.3 billion or 2.2% to $230.7 billion, the Commerce Department announced today. This decrease, down following two consecutive monthly increases, followed a 3.3% April increase. Excluding transportation, new orders decreased 0.3%. Excluding defense, new orders decreased 0.9%.

Inventories of manufactured durable goods in May, down ten of the last eleven months, decreased $1.1 billion or 0.3% to $382.5 billion. This followed a 0.4% April decrease. Machinery, down nine of the last ten months, led the decrease in inventories. 


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