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Last updateMon, 26 Sep 2016 7pm

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Manufacturing Growth Eases Again in September

At 51.4 in September, the seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) was down from 52.0 in August and pointed to the weakest improvement in overall business conditions since June. The latest PMI reading marked seven years of continuous growth across the manufacturing sector. However, the headline index was below the average seen over this period (54.0) and remained close to the post-crisis low recorded in May (50.7).

Manufacturers indicated the slowest overall rise in new business intakes so far this year, which contributed to relatively subdued job hiring and ongoing efforts to reduce inventory levels. Meanwhile, factory gate charges were reduced slightly in September, despite another marginal increase in input costs at manufacturing firms. 


Leading Economic Indicators Down Slightly in August

The Conference Board Leading Economic Index (LEI) for the U.S. declined 0.2% in August to 124.1, following a 0.5% increase in July, and a 0.2% increase in June.

“While the U.S. LEI declined in August, its trend still points to moderate economic growth in the months ahead,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “Although strengths and weaknesses among the leading indicators are roughly balanced, positive contributions from the financial indicators were more than offset by weakening of nonfinancial indicators, such as leading indicators of labor markets, suggesting some risks to growth persist.” 

Texas, Wisconsin Highlight Best Places to Work in Manufacturing

For its list of ‘The Best Places to Work in Manufacturing,’ SmartAsset looked at 389 different statistical areas and compared them on six metrics; one-year employment growth, five-year employment growth, one-year income growth, five-year income growth, the ratio of manufacturing workers to the total worker population and income left over after housing costs.

While northeastern cities tend to do well in SmartAsset’s STEM studies, in this look at manufacturing it was the southern metro areas that tended to do better. Wisconsin is tied with Texas for having the most places in the top 10, each with two.

While the national trend is down for manufacturing jobs, incomes tend to be rising for the jobs that are still available. 

Federal Reserve: U.S. Manufacturing Fell 0.4% In August

Industrial production decreased 0.4% in August after rising 0.6% in July. Manufacturing output also declined 0.4% in August, reversing its increase in July; the level of the index in August is little changed from its level in March.

Manufacturing output was also 0.4% below its level of a year earlier. In August, the indexes for durables and for other manufacturing (publishing and logging) fell 0.6% and 0.7%, respectively. Many durable goods industries posted declines of nearly 1% or more, with the largest drop, 1.9%, recorded by machinery. 

NAM: Regulations, Health Care Costs Manufacturers’ Top Concerns

Manufacturing sentiment appears to have stabilized after several quarters of declining assessments about the economic outlook, and the latest data appear to mostly back that assertion up, but with some caveats. Indeed, economic challenges continue in the sector, among them being concerns over regulation, health care costs and dampening perceived growth rates over the next 12 months despite some progress in the NAM Manufacturers' Outlook Survey for the third quarter 2016.

Large manufacturers were more upbeat about their company’s outlook this quarter, but small and medium-sized manufacturers experienced declines in their outlook in this survey. This was especially the case for the smallest of firms, with just 48.7% positive in their outlook in this survey, down from 56.1% last time. Overall, one could characterize manufacturers’ current economic outlook as cautiously encouraging, but still less-than-desired and highly varied by firm size and export sales growth expectations. 

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