Of the three Federal Reserve districts which have released their June manufacturing surveys – all were in expansion. A complete summary follows.
Analyst Opinion of Dallas Fed Manufacturing Survey
This survey remains in positive territory with new orders improving and unfilled orders significantly improving – and both in positive territory. Even though this survey declined, our opinion is that this was a stronger report than last month.
The expectations from Nasdaq / Econoday was 22.0 to 33.6 (consensus 27.0), and the reported value was 23.3. From the Dallas Fed:
The expansion in Texas factory activity continued in June, albeit at a slower pace than in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, declined 12 points to 23.3, signaling a deceleration in output growth.
Some other indexes of manufacturing activity also indicated slower growth in June. The capacity utilization and shipments indexes posted double-digit declines, falling to 21.7 and 25.5, respectively. However, demand improved further in June as the new orders index edged up to 29.6, its highest level this year.
Perceptions of broader business conditions were even more positive in June than in May. The general business activity index rose 10 points to 36.5, and the company outlook index rose five points to 33.2, its highest reading since 2006.
Labor market measures suggested robust growth in employment and longer work hours in June. The employment index stayed near last month’s six-year high at 23.9. Thirty-one percent of firms noted net hiring, compared with 7 percent noting net layoffs. The hours worked index remained highly positive but edged down to 20.2.
Price and wage pressures increased markedly in June. The raw materials prices index rose 10 points to 53.6, its highest reading since 2011. The finished goods prices index moved up to a 10-year high of 26.2. Compensation costs also accelerated, with the wages and benefits index rising seven points to 31.4.
Expectations regarding future business conditions remained largely optimistic in June. The indexes of future general business activity and future company outlook moved up to 35.9 and 38.7, respectively, with both readings significantly above average. Other indexes of future manufacturing activity showed mixed movements but remained in solidly positive territory.
