Last updateTue, 25 Feb 2020 5pm

U.S. Business Optimism Hits Three-Year Low

The latest IHS Markit Business Outlook survey signals that U.S. private sector firms are less optimistic towards the outlook for business activity over the coming 12 months than in June. The net balance of firms expecting a rise in output has dropped from +16% in June to +10% in October and is the lowest for three years. The net balance of firms forecasting growth is also below the global (+14%) and developed market (+12%) averages. Both manufacturing and service sector firms expressed a lower level of positive sentiment towards future output than earlier in the year.

Global Manufacturing Downturn May Be Easing

The global manufacturing sector contracted for the sixth successive month in October, according to the latest global PMI surveys. The J.P.Morgan Global Manufacturing PMI posted 49.8 in October, remaining below the neutral mark of 50.0. That said, a third successive rise in the PMI provided a further sign that the downturn may have bottomed out in July.

Industrial M&A Activity Thriving Despite Manufacturing Slowdown

“While the industrial segment of the economy has suffered a gradual slowdown from late 2018 to now, consolidation in this corner of the world continues apace,” Forbes reports.“Total transactions are down slightly for 2019 year to date, but average deal valuations are on par with the big numbers posted the past couple of years. Why?”

Texas Economy Still Growing, Though Pace Slows

The Texas economy is growing at a slower pace in recent months, with labor markets remaining tight. Energy activity has declined, and export growth has slowed this year. Initial unemployment claims increased slightly in early October, indicative of labor market cooling.

Austin led Texas metros in employment expansion through September (3.1%), followed by Dallas (2.3%) and Fort Worth (2.4%). Growth in Houston (2.0%) and San Antonio (1.1%) trailed the state average. The construction sector experienced the strongest gains, climbing 6.8% through September. The financial, manufacturing, and education and health services sectors also led Texas employment growth, while the energy sector shed jobs at a 2.1% annual rate.

Durable Goods Orders Down 1.2% in September

New orders for manufactured goods in September, down two consecutive months, decreased $2.9 billion or 0.6% to $496.7 billion, the U.S. Department of Commerce reported. This followed a 0.1% August decrease.

New orders for manufactured durable goods in September, down following three consecutive monthly increases, decreased $3.1 billion or 1.2% to $247.7 billion, down from the previously published 1.1% decrease. This followed a 0.2% August increase.


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