Revised October 14, 2015 ISM Manufacturing Purchasing Managers Index - - PowerPoint PPT Presentation

Revised October 14, 2015

44 46 48 50 52 54 56 58 60 62 64 66

Sept-14 Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug Sept

ISM Manufacturing Purchasing Managers’ Index

(August 2014–August 2015) Purchasing Managers' Index New Orders Production Employment Inventories

Source: Institute for Supply Management

• 1.0%
• 0.5%

0.0% 0.5% 1.0% 1.5% Aug-14 Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug

Percentage Changes in Manufacturing Production, August 2014–August 2015

Manufacturing Durable Goods Nondurable Goods

Percent

Source: Federal Reserve Board

0% 1% 2% 3% 4% 5% 6% 7%

Aug-14 Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug

Year-Over-Year Industrial Production Growth, August 2014–August 2015

Industrial Production Manufacturing Durable Goods Nondurable Goods

Percent

Source: Federal Reserve Board

73% 74% 75% 76% 77% 98 99 100 101 102 103 104 105 106 107

Jan-14 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug

Manufacturing Production and Capacity Utilization, 2014-2015

Manufacturing Production Manufacturing Capacity Utilization

Manufacturing Production (2012=100) Manufacturing Capacity Utilization (SIC)

Source: Federal Reserve Board

• 0.9%

4.6% 4.3% 2.1% 0.6% 3.9% 2.0% 2.8% 1.8% 3.0% 2.5% 2.5%

• 2%
• 1%

0% 1% 2% 3% 4% 5% 2014:I II III IV 2015:I II III IV 2016:I II III IV

Real Gross Domestic Product

(Chained 2009 Dollars) Real GDP Forecast: ↑ 2.4% (2014) ↑ 2.3% (2015) ↑ 2.5% (2016)

Source: Bureau of Economic Analysis, NAM calculations using Moody’s Analytics simulation model

88.7% 83.1% 69.2% 51.8% 70.1% 72.3% 76.1% 78.1% 86.1% 85.9% 87.3% 91.2% 88.5% 76.3% 67.3% 2012:1 2012:2 2012:3 2012:4 2013:1 2013:2 2013:3 2013:4 2014:1 2014:2 2014:3 2014:4 2015:1 2015:2 2015:3

NAM Manufacturers’ Outlook Survey by Quarter, 2013–2015

Note: Percentage of respondents who characterized the current business outlook as somewhat or very positive.

0% 1% 2% 3% 4% 5% Q1:2014 Q2:2014 Q3:2014 Q4:2014 Q1:2015 Q2:2015 Q3:2015

Expected Growth of Manufacturing Sales, Investment and Employment

Sales Investment Employment

• Avg. 12-Month Growth Rates

Sales: ↑ 2.0% Investment: ↑ 0.7% Employment: ↑ 0.3%

Source: NAM Manufacturers’ Outlook Survey Note: Expected growth rates are annual averages.

4.9% 12.4% 37.6% 47.7% 49.7% 50.7% 77.5% 79.4% Challenges with access to capital Rising raw material costs for our products Weaker global growth and slower export sales Strengthened U.S. dollar relative to other currencies Attracting and retaining a quality workforce Weaker domestic economy and sales for our products Rising health care/insurance costs Unfavorable business climate (e.g., taxes, regulations)

Primary Current Business Challenges,

Third Quarter 2015

Source: NAM Manufacturers’ Outlook Survey Note: Respondents were able to check all that apply. Therefore, responses exceed 100 percent.

23.5% 64.2% 12.3% The FOMC's actions stem from improvements in the overall U.S. economy, and it is time for the Fed to "take its foot off of the accelerator" a little to reflect that progress. There are still sufficient weaknesses in the U.S. economy, even with recent progress. As such, the Fed should not be in a hurry to raise rates. It should wait until 2016 to start doing so. I have no opinion.

“Which of the following statements regarding the Federal Reserve’s possible normalization of rates would be true for your firm?”

Source: NAM Manufacturers’ Outlook Survey

0% 1% 2% 3% 4% 5% 6%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Effective Federal Funds Rate, 2005–2015

Source: Federal Reserve Board

48.6 52.1 47.2 51.0 51.5 52.3 47.0 53.0 49.2 44.4 Canada Mexico China Japan United Kingdom Germany Brazil Netherlands South Korea Hong Kong

Purchasing Managers’ Indices for the Top 10 Export Markets for U.S. Manufactured Goods

(September 2015)

Emerging Markets Manufacturing PMI: 48.5 Eurozone Manufacturing PMI: 52.0 Global Manufacturing PMI: 50.6 U.S. Manufacturing PMI (Markit): 53.1

Source: Markit

• 12%
• 10%
• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% Aug-14 Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug

Year-Over-Year Growth in Goods Exports and Imports, August 2014–August 2015

Goods Exports Goods Imports

Source: U.S. Department of Commerce

74 76 78 80 82 84 86 88 90 92 94

Trade-Weighted U.S. Dollar Index Against Major Currencies

(Currency Units per U.S. Dollar)

Index (1973=100)

Jan-14 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug Sept Oct Source: Federal Reserve Board

250 221 423 329 201 266 119 187 260 245 223 136 142 9 23 45 19 17 3 6 6 1 11

• 18
• 9

Sep-14 Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug Sep

Monthly Changes in Employment

(September 2014–September 2015, in Thousands of Employees)

Nonfarm Payrolls Manufacturing

–

Source: Bureau of Labor Statistics

4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 11.5 11.6 11.7 11.8 11.9 12.0 12.1 12.2 12.3 12.4 12.5 2013 2014 2015

Employment Situation, 2013–2015

Manufacturing Employment Unemployment Rate

Millions

• f Workers

Unemployment Rate

Source: Bureau of Labor Statistics

1.2 1.4 2.0 5.1 5.7 12.0 12.5 13.5 13.8 15.3 15.9 46.0 Electrical equipment and appliances Computer and electronic products Petroleum and coal products Chemicals Wood products Miscellaneous durable goods manufacturing Miscellaneous nondurable goods manufacturing Plastics and rubber products Nonmetallic mineral products Furniture and related products Food manufacturing Transportation equipment

Manufacturing Sectors with the Largest Net Employment Gains

(September 2014 to September 2015, in thousands of employees)

Source: Bureau of Labor Statistics

200 225 250 275 300 325 350 Jan-14 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul

Manufacturing Job Openings, Hires and Separations

(January 2014–July 2015, in thousands of workers) Job Openings Hires Separations

Source: Bureau of Labor Statistics

70 75 80 85 90 95 100 105 110 20 30 40 50 60 70 80 90 100 110 120 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Monthly Business and Consumer Sentiment Surveys

University of Michigan Consumer Confidence Conference Board Consumer Confidence NFIB Small Business Optimism

Consumer Confidence Indices NFIB Small Business Index

Source: University of Michigan/Thomson Reuters, Conference Board, National Federation of Independent Business

10 15 20 25 30 35 40 45 50 55 60 65 200 400 600 800 1,000 1,200 1,400 1,600 2010 2011 2012 2013 2014 2015

Housing Market Situation

Housing Starts Housing Permits NAHB Housing Market Index

NAHB Housing Market Index Housing Starts, Permits (in thousands of units)

Source: U.S. Census Bureau, National Association of Home Builders

$25 $30 $35 $40 $45 $50 $55 $60 $65 $70 $75 $80 $85 $90 $95

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Manufacturing Construction Spending, 2005–2015

(Value of Private Construction Put in Place, in Billions of Dollars)

Source: U.S. Census Bureau

• 2%
• 1%

0% 1% 2% 3% Sep-14 Oct Nov Dec Jan-15 Feb Mar Apr May Jun Jul Aug Sep

Year-Over-Year Percentage Changes in the Producer Price Index, September 2014–September 2015

Final Demand Final Demand Less Food and Energy

Percent

Source: Bureau of Labor Statistics