Trade, Inability To Find Skilled Workers Impacting Manufacturing Outlook
- According to the National Association of Manufacturers’ (NAM) quarterly outlook survey, manufacturing optimism dipped to 79.8 in the second quarter of 2019 from 89.5 in the first, and worries about trade negotiations were one of the main reasons. Fifty-six percent of respondents named trade uncertainties as their company’s top challenge. That answer was the second most-mentioned concern facing manufacturers, after the ability to find qualified workers at 68.8 percent.
- The United States economy increased at an annual rate of 3.1 percent in the first quarter of 2019, up from 2.2 percent growth in the last quarter of 2018. In related news: the Federal Reserve Bank of Chicago’s National Activity Index, a gauge of future growth, rose to -0.05 in May from -0.48 in April.
- As Reuters reports, the Canadian economy expanded 0.3 percent in April, a rate that was faster than the 0.1 percent expansions analysts had predicted. The economy advanced 0.5 percent the month before making it “the strongest two-month expansion” in the country since November and December 2017. The manufacturing sector contracted, however, by 0.8 percent, the largest decline since August 2017.
- According to the International Aluminum Institute, global aluminum production in May 2019 was 5.43 million metric tons, flat from May 2018 production. China produced 3.09 million metric tons, a figure that also was flat from the year prior. In North America, production reached 326,000 tons and in Europe production was at 293,000 metric tons.
- FastmarketsAMMreported last week that global crude steel production was 162.74 million tons in May 2019, up 5.4 percent from a year earlier. Chinese production increased 10 percent year-over-year, the most of any nation, while India’s output increased rose 5.1 percent. U.S. production rose 5.4 percent year-over-year and output in France and Germany fell.
- According to the Federal Reserve Bank of Dallas, perceptions of broader business conditions among Texas manufacturers shifted down again in June. The growth in the number of new orders and shipments both weakened last month. The Federal Reserve Bank of Richmond, meanwhile, said its manufacturing index was little changed in June. The bank’s composite index dropped slightly from +5 in May to +3 in June, resulting from a drop in the employment index. The other two components, shipments and new orders, rose slightly. The Federal Reserve Bank of Kansas City’s manufacturing reading was flat last month, but nearly 70 percent of manufacturers reported confidence in the U.S. economy and a majority said they have not changed their 2019 plans for employment and capital spending.
- In other economic news: real disposable personal incomes in the United States rose 0.3 percent in May while real personal consumption expenditures increased 0.2 percent; the University of Michigan consumer sentiment index fell from 100.0 in May to 98.2 in June due to concerns about U.S. tariffs; and the Conference Board’s Consumer Confidence Index fell to 121.5 in June, down from 131.3 in May.