08222017Tue
Last updateMon, 21 Aug 2017 7pm

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Texas Manufacturing Levels Reach Three-Year High

Texas factory activity increased at a faster pace in May, according to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, moved up eight points to 23.3, reaching its highest level since April 2014.

Other measures of current manufacturing activity also rose to levels not seen since mid-2014. The new orders index pushed up to 18.1, and the growth rate of orders index rose to 12.3, marking its fifth consecutive positive reading. The capacity utilization index moved up to 19.4, with roughly a third of firms noting increased utilization. The shipments index surged 15 points to 24.7, reaching a level not seen in nearly 10 years. 


Durable Goods Orders Fall to Five-Month Low

New orders for manufactured durable goods in April decreased $1.6 billion or 0.7% to $231.2 billion, the U.S. Department of Commerce announced. Economists polled by MarketWatch forecast a 1% decline in orders. The April decrease, down following four consecutive monthly increases, followed a 2.3% March increase.

“Surveys suggest that businesses are ecstatic about the change in tone in Washington and are prepared to unleash a flurry of pent-up investment, but they are holding off until there is more clarity on corporate tax reform and other elements of the new administration’s fiscal agenda,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. 

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.” 

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