11242017Fri
Last updateWed, 22 Nov 2017 2pm

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Conference Board Economic Index Rose in October

The Conference Board Leading Economic Index (LEI) for the U.S. increased 1.2% in October to 130.4 (2010 = 100), following a 0.1% increase in September, and a 0.4% increase in August.

“The U.S. LEI increased sharply in October, as the impact of the hurricanes dissipated,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the US economy will continue through the holiday season and into the new year.” 


U.S. Industrial Output Up 0.9% in October

Industrial production rose 0.9% in October, and manufacturing increased 1.3%. The index for utilities rose 2.0%, but mining output fell 1.3%, as Hurricane Nate caused a sharp but short-lived decline in oil and gas drilling and extraction. Even so, industrial activity was boosted in October by a return to normal operations after Hurricanes Harvey and Irma suppressed production in August and September. Excluding the effects of the hurricanes, the index for total output advanced about 0.3% in October, and the index for manufacturing advanced about 0.2%. 

Empire State Manufacturing Survey Shows Continued Growth

Business activity continued to grow strongly in New York State, according to firms responding to the November 2017 Empire State Manufacturing Survey. Though the headline general business conditions index fell eleven points from the multiyear high it reached last month, it remained firmly in positive territory at 19.4. The new orders index climbed to 20.7 and the shipments index came in at 18.4—readings that pointed to ongoing solid gains in orders and shipments. Delivery times were slightly shorter than last month, and inventory levels edged higher. Labor market indicators reflected moderate employment gains and little change in hours worked. Both input prices and selling prices rose at a pace that was little changed from last month. Indexes assessing the six-month outlook suggested that firms were very optimistic about future business conditions. 

Manufacturing Technology Orders Continue "Upward Trend"

Manufacturing technology orders in September continued their upward trend, ending the third quarter on a strong note. According to the latest U.S. Manufacturing Technology Orders (USMTO) Report, bookings for September 2017 were up 6% from August and posted a year-to-date figure 5% higher than the first nine months of 2016. The monthly total of $403 million fell short of September 2016 by 26%, a typical drop-off in odd-numbered years when IMTS, the largest manufacturing technology show in the Americas, does not occur. 

Texas Economy Resilient to Storm Effects

Texas lost fewer jobs than expected in September as a result of Hurricane Harvey, and post-hurricane data from the Texas Business Outlook Surveys point toward a rapid recovery from the storm. The 2017 Texas job growth forecast remained at 2.6% after adjusting the model input data for the temporary impact of the storm.

There are cyclical and structural headwinds to the Texas economic outlook. Labor markets have grown significantly tighter this year; the September Texas unemployment rate was 4%, having fallen 1% since April and is currently at a level last observed in December 2000. There is some slack remaining in Houston, but not much, which could hamper hurricane recovery efforts. Given Texas is highly dependent on trade with Mexico, uncertainty around ongoing trade negotiations is another headwind. 

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