05192019Sun
Last updateThu, 16 May 2019 4pm

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Most U.S. Manufacturers Expect Sales to Grow in 2019

The certified public accounting firm of Adams, Brown, Beran & Ball, Chartered (ABBB) has jointly released the results from the 2019 ABBB/Leading Edge Alliance National Manufacturing Outlook Survey. The survey asked about manufacturing companies’ performance in 2018, managers’ expectations for 2019, and the strategies that high-performing manufacturers find most effective.

Eight out of ten U.S. manufacturers expect to grow sales this year, buoyed by their optimism about the strength of regional, national and global economies. Manufacturers’ top three priorities are growing sales, improving profitability and addressing the workforce shortage. 


Manufacturing Output Rose to All-Time High

According to the U.S. Department of Commerce, manufacturers produced $2.35 trillion in value-added output in the third quarter of 2018, an all-time high, with the sector accounting for 11.4% of real GDP. Adjusting for inflation (in chained 2012 dollars), real value-added output in manufacturing also set a new record, and overall, manufacturing contributed 0.31% to real GDP growth in the quarter. 

Durable Goods Orders Up 1.2% in December

New orders for manufactured durable goods in December increased $3.0 billion or 1.2% to $254.4 billion, the U.S. Department of Commerce announced. This increase, up two consecutive months, followed a 1.0% November increase. Excluding transportation, new orders increased 0.1%. Excluding defense, new orders increased 1.8%. Transportation equipment, up four of the last five months, led the increase, $2.8 billion or 3.3% to $90.2 billion. 

Leading Economic Indicators Down Slightly Last Month

The Conference Board Leading Economic Index (LEI) for the U.S. declined 0.1% in January (according to preliminary estimates) to 111.3, following no change in December, and a 0.1% increase in November.

“Based on preliminary data, the U.S. LEI declined very slightly in January and December’s decline was revised up to no change,” said Ataman Ozyildirim, director of economic research at The Conference Board. “In January, the strengths in the financial components were offset by the weaknesses in the labor market components. The U.S. LEI has now been flat essentially since October 2018. The Conference Board forecasts that U.S. GDP growth will likely decelerate to about 2% by the end of 2019.” 

Small Business Optimism Down a Fifth Straight Month

The NFIB Small Business Optimism Index slipped 3.2 points in January, as owners continued hiring and investing, but expressed rising concern about future economic growth. The 101.2 reading, the lowest since the weeks leading up to the 2016 elections, remains well above the historical average of 98, but indicates uncertainty among small business owners due to the 35-day government shutdown and financial market instability. The NFIB Uncertainty Index rose seven points to 86, the fifth highest reading in the survey’s 45-year history. 

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