Last updateMon, 19 Aug 2019 4pm

Manufacturing Output Rose in June

Industrial production was unchanged in June, as increases for both manufacturing and mining offset a decline for utilities. For the second quarter as a whole, industrial production declined at an annual rate of 1.2%, its second consecutive quarterly decrease. In June, manufacturing output advanced 0.4%.

Despite the gains in the past two months, factory production declined at an annual rate of 2.2% in the second quarter, about the same pace as in the first quarter. In June, the indexes for durables and for nondurables advanced 0.4% and 0.5%, respectively.

Small Business Optimism Reverses Last Month’s Gain

Optimism faded modestly in June, with the Small Business Optimism Index slipping 1.7 points to 103.3, reversing the gain posted in May but still leaving optimism at historically high levels. The main driver came from the inventory sector, with owners marking existing stocks as very “lean” and planning to add to them. Sales and earnings trends softened, expected credit conditions remained favorable. Uncertainty levels increased, as expectations for sales gains and general business conditions faded.

Some “tariff” Inflation pressures may be surfacing as the percentage of firms raising selling prices rose significantly with 30% of owners reporting recent changes in China trade policy negatively impacting their business. Job openings and plans to create jobs weakened a bit but remain historically very strong. Reports of higher worker compensation also cooled.

Machine Tool Orders Post Modest Gains in May

U.S. manufacturing technology orders rose to $378.4 million in May, an increase of 7.3% over the previous month. Orders for metal cutting technologies grew 4.5% while forming and fabricating technologies increased 64.8% over the previous month and 117% over May 2018.

Despite the modest uptick in total orders from April, orders are down nearly 22% from May 2018, when orders totaled $484.2 million. The year-to-date total for 2019 increased to $1,867 million, a 13.5% decline from the 2018 total through May.

Global Manufacturing PMI Lowest Since October 2012

The performance of the global manufacturing sector continued to weaken at the end of the second quarter. Production fell for the first time since October 2012, as new order contracted at the fastest pace for almost seven years.

Business optimism slumped to a series-record low. At 49.4 in June, the J.P. Morgan Global Manufacturing PMI –a composite index produced by J.P. Morgan and IHS Markit in association with ISM and IFPSM –fell to its lowest level for over six-and-a-half years and posted back-to-back sub-50.0 readings for the first time since the second half of 2012.

South Carolina Manufacturing Center Features Mechatronics Program

Employers across South Carolina have expressed difficulties in accessing a steady pipeline of highly trained workers, and Georgetown, SC employers project over 240 jobs will be needed in welding, mechatronics, machine tool and robotics over the next two to five years.

Horry-Georgetown Technical College’s new Georgetown Center for Advanced Manufacturing is projected to support more than $14 million in new capital investment in the community over the next five years.

The new 30,000 square foot facility will be home to advanced welding technologies, machine tool technology and the mechatronics technology programs. Students in the mechatronics program will learn the fundamental skills in electronics, mechanical and fluid power, and automated controls commonly found in the manufacturing industry. Graduates of this associate degree program will be able to perform a systemic analysis and troubleshoot equipment and machinery utilized in the industry.

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