11152018Thu
Last updateThu, 15 Nov 2018 4pm

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Empire State Manufacturing Index Points to Strong Activity

Manufacturing firms in New York State reported that business activity continued to expand in October. The general business conditions index moved up two points to 21.1, suggesting that the pace of growth picked up slightly this month. Roughly 36% of respondents reported that conditions had improved over the month, while only 15% reported that conditions had worsened. Looking ahead, firms generally remained optimistic about the six-month outlook. 


Manufacturers Continue Capacity Expansion

Manufacturing technology orders posted an unexpected surge in August, climbing 28% over August 2017 and bringing the year-to-date growth rate to 23% for 2018. The latest U.S. Manufacturing Technology Orders Report from the Association for Manufacturing Technology showed that orders totaled $501 million for the month, up 26% from July and the largest August order level in the program’s history.

Texas Economy Growing but Signs of Constraints Emerge

Year to date, Texas employment growth is an annualized 3%, well above the U.S. growth of 1.7%. Regional activity is also expanding rapidly, with the September readings of the Dallas Fed Texas Business Outlook Surveys remaining near multiyear highs for production and revenue. Moreover, Texas personal income growth in the second quarter was the highest in the nation at 6%, which bodes well for second-quarter GDP growth. First-quarter real GDP, the most recent GDP data available at the state level, shows the Texas economy grew an annualized 2.9% quarter over quarter compared with 2.2% for the nation.

The Texas economy is likely growing above potential, which means there may be capacity constraints acting as bottlenecks or speed limits on the expansion. 

NAM Survey: On Pace for Year of Optimism

On the heels of yet another positive employment report showing 18,000 manufacturing jobs were created in September, the National Association of Manufacturers (NAM) released the results of the Manufacturers’ Outlook Survey for the third quarter of 2018. According to the results, optimism among manufacturers remains exceedingly high (92.5%) following enactment of tax and regulatory reform and is on pace for the highest yearly reading in the survey’s 20-year history. In addition, the four-quarter average from Q4 2017 through Q3 2018 rose to 93.9%—making it the highest one-year average on record. 

Parents Undervalue Manufacturing as a Career Choice

According to a national survey by Kronos, while 58% of parents want their child to be knowledgeable about science, technology, engineering, and math (STEM) subjects and 43% agree STEM-focused careers have a promising future, only 20% of parents associate STEM education with the manufacturing industry. To inspire and recruit the next generation of modern manufacturers, these findings suggest Manufacturing Day and similar efforts to prioritize STEM education and raise the profile of the manufacturing industry are more important than ever. 

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