January 2017 Economic Indicators
Melanie Garza - Director of Strategy & Growth
Manufacturing Hit 2016 High in December
The PMI®, New Orders, Production and Employment Indexes all registered new highs in December for the year 2016 and the highest since December 2014, reported the Institute for Supply Management. The panel also stated that forward-looking comments are positive.
Manufacturing expanded in December as the PMI® registered 54.7%, an increase of 1.5% over November, indicating growth for the fourth consecutive month and a new high reading for the year.
The New Orders Index registered 60.2%, up 7.2% from November; The Production Index measured 60.3% and 4.3% higher over November; and the Employment Index registered 53.1%, an increase of 0.8% over November.
The nine industries reporting growth in new orders in November — listed in order — are:
- Petroleum & Coal Products
- Miscellaneous Manufacturing
- Textile Mills
- Paper Products
- Computer & Electronic Products
- Food, Beverage & Tobacco Products
- Chemical Products
- Primary Metals
The nine industries reporting a decrease in new orders during November — listed in order — are:
- Furniture & Related Products
- Printing & Related Support Activities
- Wood Products
- Apparel, Leather & Allied Products
- Electrical Equipment, Appliances & Components
- Nonmetallic Mineral Products
- Fabricated Metal Products
- Transportation Equipment
- Plastics & Rubber Products
CEO Confidence Leaps
The Measure of CEO Confidence hit its highest mark in nearly 6 years in the fourth quarter of 2016, according to The Conference Board. The Measure now reads 65, up from 50 in the third quarter of 2016.
CEOs’ assessment of current economic conditions was considerably more optimistic, with close to 60% saying conditions were better compared to six months ago, up from just 17% percent last quarter. Business leaders’ appraisal of current conditions in their own industries also improved significantly, with 46% stating conditions in their own industries have improved versus only 21% in the third quarter.
CEOs’ short-term outlook for the U.S. economy also improved markedly, with approximately 67% expecting better economic conditions over the next six months, up from 25% last quarter. The outlook for their own industries was also more favorable, with 58 percent of CEOs anticipating an improvement over the next six months, compared to about 23 percent in the third quarter.
The Conference Board also reported that the majority of chief executives expect changes in their firms’ selling prices in 2017 — with about two-thirds of CEOs anticipating price increases of less than 4%, and only about 7% expecting increases in excess of 4%.
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com