05242019Fri
Last updateThu, 23 May 2019 6pm

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Most Economists See Recession Within Three Years

“Three-fourths of the NABE Policy Survey panelists expect an economic recession by the end of 2021,” said NABE President Kevin Swift, CBE, chief economist at the American Chemistry Council. While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021. A majority of panelists also indicates they would be worried about a budget deficit in the U.S. that equaled up to 4% of gross domestic product. This is an outcome which will likely occur in 2019 given the deficit for fiscal year 2018 was 3.85%, and respondents expect spending policies to increase the deficit compared with the Congressional Budget Office’s current 10-year baseline estimate. 


Texas Manufacturing Expansion Continued in February

Texas factory activity continued to expand in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, slipped four points to 10.1, indicating a slight deceleration in output growth.

Most other measures of manufacturing activity also suggested continued but slower expansion in February. The new orders index fell five points to 6.9, its lowest reading in more than two years. Similarly, the capacity utilization index fell eight points to 7.1 and reached a two-year low. Meanwhile, the shipments index was largely unchanged at 10.7. 

New Manufacturing Business Growth Declined in 2018

The manufacturing industry didn’t see nearly as strong of business formation growth in 2018 as it had in 2017, which was up 38.3% YoY from 2016 to 2017. It did, however, maintain a consistent volume rank, once again landing at number 15 in the annual report from Swyft Filings.

Despite the increasing demand for equipment needed for industrial activities—like construction projects, oil and gas fields, and large industrial facilities—smaller businesses have struggled to compete with larger companies that offer multiple product lines to cover the full spectrum of industrial operations. Additionally, customers are less likely to stay loyal to a company that isn’t offering innovative products, technology, and digitization. 

Most U.S. Manufacturers Expect Sales to Grow in 2019

The certified public accounting firm of Adams, Brown, Beran & Ball, Chartered (ABBB) has jointly released the results from the 2019 ABBB/Leading Edge Alliance National Manufacturing Outlook Survey. The survey asked about manufacturing companies’ performance in 2018, managers’ expectations for 2019, and the strategies that high-performing manufacturers find most effective.

Eight out of ten U.S. manufacturers expect to grow sales this year, buoyed by their optimism about the strength of regional, national and global economies. Manufacturers’ top three priorities are growing sales, improving profitability and addressing the workforce shortage. 

Manufacturing Output Rose to All-Time High

According to the U.S. Department of Commerce, manufacturers produced $2.35 trillion in value-added output in the third quarter of 2018, an all-time high, with the sector accounting for 11.4% of real GDP. Adjusting for inflation (in chained 2012 dollars), real value-added output in manufacturing also set a new record, and overall, manufacturing contributed 0.31% to real GDP growth in the quarter. 

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