Health of Manufacturing Industry is Improving
Recently the Manufacturers Alliance for Productivity and Innovation (MAPI) released good information about the health of important supply chain sectors such as primary metals, fabricated metals, and machinery. According to the Census Bureau, many new orders were placed for long lasting durable goods. The orders for durable goods rose 2.6 percent in March. Orders were still up 2 percent even after factoring in the transportation element, which is an improvement from the .1 percent increase in February. Any obstructions, which may have caused delays with the placement of orders, were most likely induced by inclement weather this past winter.
Additionally, good news regarding business equipment spending was also reported by Cliff Waldman, senior economist for the Manufacturers Alliance for Productivity and Innovation (MAPI). He stated, “New orders for non-defense capital spending excluding aircraft, a proxy for business equipment demand, rose 2.2 percent in March, more than reversing a 1.1 percent decline in February. Year-over-year (year-to-date), however, this critical index is up only 1.9 percent and we have yet to see business investment break out of its unusually weak and volatile performance.” He added, “The U.S. economy’s growth performance remains steady””though frustratingly slow””and the global environment is facing numerous regional issues, including an extended slowdown in China and deflation risk in the Eurozone. Moderate growth with a modest downside risk is the most likely path for the U.S. factory sector through the balance of 2014.”
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