07262016Tue
Last updateTue, 26 Jul 2016 4pm

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Sharpest Rise in U.S. Manufacturing Production Since November

July data signaled a further rebound in business conditions across the U.S. manufacturing sector, led by a robust expansion of incoming new work and the fastest upturn in production volumes for eight months. Job creation also strengthened in July, with the latest increase in payroll numbers the fastest seen over the past 12 months. At the same time, input cost inflation edged up to its strongest since November 2014 but factory gate prices rose only marginally.

At 52.9 in July, up from 51.3 in June, the seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) pointed to a solid improvement in overall business conditions. Moreover, the headline index continued to recover from its post-crisis low seen in May, with the latest reading the strongest since October 2015. Faster rises in output, new orders and employment were the key positive influences in July, while sustained inventory cutbacks acted as a drag on the PMI. 


Texas Manufacturing Activity Stabilizes

Texas factory activity held steady in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in near zero after two months of negative readings, suggesting output stopped falling this month.

Some other measures of current manufacturing activity also reflected stabilization, and demand declines abated somewhat. The capacity utilization and shipments indexes posted near-zero readings, up from negative territory in May and June.

Perceptions of broader business conditions were notably less pessimistic. While the general business activity index remained negative for a nineteenth month in a row, it jumped 17 points to –1.3 in July, the highest figure since Dec. 2014. 

STEM Jobs in the U.S. Growing Faster Than Other Fields

The U.S. Department of Commerce estimates that jobs in STEM will grow 17% by 2018—that’s 55% faster than non-STEM jobs over the next decade. Several reports have linked STEM education to the continued scientific leadership and economic growth of the U.S. However, economic projections also predict that there could be as many as 2.4 million unfilled STEM jobs by 2018, according to a new whitepaper from the National PTA. 

IMF Cuts Global Growth Forecast After Brexit Vote

The International Monetary Fund (IMF) cut its forecasts for global economic growth this year and next as the unexpected U.K. vote to leave the European Union creates a wave of uncertainty amid already-fragile business and consumer confidence.

The global economy is projected to expand 3.1% this year and 3.4% in 2017, according to the IMF. Those forecasts represent a 0.1% reduction for both years relative to the IMF’s April World Economic Outlook.

In the U.S., weaker-than-expected growth in the first quarter prompted the IMF to reduce its 2016 forecast to a gain of 2.2%, 0.2% less than the April outlook. The IMF left its 2017 forecast for U.S. growth unchanged at 2.5%. 

Manufacturing, Skilled Trade Jobs Will Become Harder to Fill

Baby boomer retirements will create a shortage of skilled workers in mature economies, leading to higher wages and lower profits. This shortage will likely last for the next 15 years, according to a report from The Conference Board, who argues that companies must begin treating talent as an asset rather than a cost.

Because the labor shortages will affect some occupations and countries more than others, companies must work hard to identify their own future skills gaps, then polish their recruitment and retention practices to fill them with the best talent. 

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