January 2016 Economic Indicators
Melanie Garza - Director of Strategy & Growth
Durable Goods Outlook Points Positive
New orders for manufactured goods continued its downward spiral. The index fell 0.2% in November, for the third time in four months, coming off of a slight increase in October of 1.3%. The manufacturing sector hit a three year low in November as the PMI index fell below 50.
On a positive note, the outlook for durable goods is somewhat positive. New orders for durable goods dipped slightly following the 2.8% increase in October, posting a more stable environment. Shipments of durable goods climbed 0.8% in November coming off of a 1.2% decrease in October. At the same time, unfilled orders also rose 0.2% in November and 0.3% in October with transportation equipment posting the largest increase. Inventories are dropping and fell another 0.3%.
Shipments of transportation equipment increased 2.6% in November and also saw the biggest drop in inventory levels at 0.7%. Primary metals suffered the biggest drop and with new orders falling 2.9% and is down five of the last six months.
Capacity utilization for the industrial sector fell 0.5% in November to 77%. A year ago, capacity utilization was reported at 79% and its long-run (1972–2014) average is 80.1%. The low was in 2009 at 66.1%.
Specific manufacturing sector capacity utilization rates are as follows: durable goods at 76.1%; primary metals at 70.7%; fabricated metal at 80.3%; machinery at 75.6%; computers and electronic goods at 71.5%; electrical equipment and appliances at 88.1%; automotive at 79.5% and aerospace at 77.6%.
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com.