03262019Tue
Last updateMon, 25 Mar 2019 8pm

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Survey Finds Manufacturers Optimistic in 2019

According to the 2019 National Manufacturing Outlook and Insights report from Leading Edge Alliance, manufacturers expect raw materials, labor costs, lack of available talent and competition to be significant hurdles in 2019. The tariffs implemented by President Trump provide productivity issues; however, an increase in spending on big data and business intelligence deliver innovative technology for minimizing productivity concerns


Manufacturing PMI Rebounds in January

Manufacturing growth regained momentum at the start of 2019, according to the latest survey data. Adjusted for seasonal influences, the IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) rose to 54.9 from 53.8 in December. The improvement in overall business conditions was driven by the fastest expansion of production since May 2018. New orders, employment and stocks of purchases also increased at faster rates in January. Survey respondents generally cited robust domestic demand, which more than offset a slowdown in export sales growth to its weakest for three months. Moreover, latest data indicated that manufacturers are more confident about the 12-month business outlook than at any time since May 2018. 

IMF Downgrades Growth Forecast

While global growth in 2018 remained close to post-crisis highs, the global expansion is weakening and at a rate that is somewhat faster than expected. This update of the World Economic Outlook (WEO) projects global growth at 3.5% in 2019 and 3.6% in 2020, 0.2 and 0.1% below last October’s projections.

The U.S. expansion continues, but the forecast remains for a deceleration with the unwinding of fiscal stimulus. Across advanced economies, the IMF foresees growth to slow from 2.3% in 2018 to 2% in 2019 and 1.7% in 2020. This softening growth momentum has provided little lift to inflation. While core inflation is close to target in the U.S. where growth is above trend, it remains significantly below target in the euro area and Japan. 

Consumer Sentiment at Two-Year Low

The University of Michigan Index of Consumer Sentiment declined in early January to its lowest level since Trump was elected. The decline was primarily focused on prospects for the domestic economy, with the year-ahead outlook for the national economy judged the worst since mid-2014. The loss was due to a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies. 

U.S. Manufacturing Output Sees Biggest Gain in 10 Months

Industrial production increased 0.3% in December after rising 0.4% in November. For the fourth quarter as a whole, total industrial production moved up at an annual rate of 3.8%. In December, manufacturing output increased 1.1%, its largest gain since February 2018, and increased at an annual rate of 2.3% in the fourth quarter; the index rose 2.5% between the fourth quarter of 2017 and the fourth quarter of 2018. 

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