05292017Mon
Last updateFri, 26 May 2017 2pm

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Kansas City Fed Manufacturing Survey Shows Expansion in May

Tenth District manufacturing activity continued to expand at a moderate pace in May, and expectations for future activity increased strongly. Price indexes were mixed, but recorded little change overall. The month-over-month composite index was 8 in May, up from 7 in April but down from 20 in March.

Activity at durable manufacturing plants eased slightly but remained positive, while nondurable activity improved, particularly for plastics and chemicals. Month-over-month indexes were mixed with little change overall. The production and shipments indexes edged slightly lower, while the employment and order backlog indexes inched higher. The new orders and new orders for exports indexes were both basically unchanged. 


Business Borrowing for Capital Investment Up 8% in April

The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index, which reports economic activity from 25 companies representing a cross section of the $1 trillion equipment finance sector, showed their overall new business volume for April was $7.9 billion, up 8% year-over-year from new business volume in April 2016. Volume was down 11 percent month-to-month from $8.9 billion in March. Year to date, cumulative new business volume was up 5% compared to 2016. 

Leading Economic Indicators for the U.S. Increased in April

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.3% in April to 126.9 (2010 = 100), following a 0.3% increase in March, and a 0.5% increase in February.

“The recent trend in the U.S. LEI, led by the positive outlook of consumers and financial markets, continues to point to a growing economy, perhaps even a cyclical pickup,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “First quarter’s weak GDP growth is likely a temporary hiccup as the economy returns to its long-term trend of about 2%. While the majority of leading indicators have been contributing positively in recent months, housing permits followed by average workweek in manufacturing have been the sources of weakness among the U.S. LEI components.” 

ISM: Manufacturing Growth Should Continue Through 2017

According to the Institute for Supply Management (ISM), 64% of respondents from the panel of manufacturing supply management executives predict their revenues will be 8.5% greater in 2017 compared to 2016, 12% expect a 9.6% decline, and 24% foresee no change in revenue. This yields an overall average forecast of 4.4% revenue growth among manufacturers for 2017. This current prediction is 0.2% below the December 2016 forecast of 4.6% revenue growth for 2017, but is 3.5% above the actual revenue growth reported for all of 2016. With operating capacity at 82.5%, an expected capital expenditure increase of 5.2%, an increase of 2.5% for prices paid for raw materials, and employment expected to increase by 1.3% by the end of 2017 compared to the end of 2016, manufacturing is positioned to grow revenues while managing costs through the remainder of the year. 

DOL Secretary Pushes Public-Private Apprenticeships

Speaking at the G-20 labor and employment ministers' meeting on May 19, U.S. Secretary of Labor Alexander Acosta emphasized his support for fostering the growth of apprenticeships, a major priority for President Trump and the Department of Labor. The secretary's remarks reinforce the U.S.’s commitment to increasing the number of quality apprenticeships, including expansion into high-growth, emerging sectors where apprenticeships have historically been rare.

“CEO after CEO has told me that they are eager to fill their vacancies, but they cannot find workers with the right skills,” said Acosta. 

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