Metals & Manufacturing Outlook July 2018

Page 1

In this issue:

ManufacturingThe Bellwether Sector By Tim Grady, Co-host of Manufacturing Talk Radio page 18

METALS OUTLOOK PAGE 9

ISSUES OUTLOOK PAGE 13

JUNE

ISM PMI:

60.2%

Released on July 2nd The Full Report Page 21

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CORPORATION


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IN THIS ISSUE                                    PUBLISHERS STATEMENT - p.2 MANUFACTURING OUTLOOK - p.3 Publisher – Lewis A. Weiss Editor-In-Chief – Tim Grady Design – Rovere Media

INTRODUCING WOMEN AND MANUFACTURING - p.6

Contributing Writers:

NORTH AMERICAN OUTLOOK - p. 7

Royce Lowe, UK and EU International Correspondent

METALS OUTLOOK - p.9

Tim Grady, Co-Host, Manufacturing Talk Radio

AUTOMOTIVE OUTLOOK - p.10

Chris Kuehl, PH.D - Chief Economist, FMA

AEROSPACE OUTLOOK - p.12

Norbert Ore, Senior Correspondent for Global PMI Survey Reports

ISSUES OUTLOOK - p.13 by ROYCE LOWE

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ENERGY OUTLOOK - p.14

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EUROZONE OUTLOOK - p.15 ASIA OUTLOOK - 16 SOUTH AMERICA OUTLOOK - 17 MANUFACTURING - THE BELLWETHER SECTOR - p.18 by TIMGRADY GLOBAL PMI OUTLOOK - p.21 by NORBERT ORE JUNE ISM PMI REPORT - p.22

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Metals & Manufacturing Outlook

PUBLISHERS STATEMENT

BY LEWIS A. WEISS                                    Okay – now I’m going to just say it: Tariffs are a terrible idea and they do not work to protect U.S. companies, markets, imports or exports. This is pure folly tried by several U.S. presidents that have back-fired in every case – every time. Billions of dollars that should be feeding the U.S. economy are being sucked up into the U.S. Treasury as Customs collects tariffs and imports (manufacturers, retailers, chemicals, and any other industry buying raw materials from China, Russia, and other countries hit with tariffs) while countries hit with tariffs retaliate on our exports, including agricultural products. Farmers, who generally struggle to make ends meet, are really feeling the pain from dairy to pork to soybean exports being hit with tariffs on their exports. The National Association of Manufacturers is pushing against further tariffs and existing ones. Both sides of the aisle in the U.S. Senate passed a nonbinding resolution 88-11 calling on President Trump to get congressional approval before using national security as a reason for imposing tariffs on other nations, which is ridiculous on 3 counts: 1) It is non-binding, so it amounts to a slap on the hand that is mostly meaningless, a waste of the taxpayers time and the Senate’s time, 2) It continues to allow tariffs to exist when they | July 2018

have been consistently shown to be a failed economic tool that has never worked, and 3) It does nothing to reverse the existing tariffs that are clearly damaging to voters across the country who may vote differently in November of 2018 and November of 2020 (by which time this expansion may have tanked). Political commentary aside, consumers will soon feel this as prices rise for goods they buy, and the tax reduction they saw vanishes in those price hikes. In fact, if this continues, consumers will be worse off than they were in 2017 and some 400,000 may even be unemployed as a direct result of the tariffs. Manufacturers are already anticipating layoffs, especially in the automotive industry as aluminum and sheet metal prices rise, and component parts made with steel and aluminum become more expensive. Soybean prices, pork futures, and even cheese sales are taking a big hit along with hundreds of other exports to China and even Canada. No country is going to sit idle and simply take one hit after another from the U.S. – not even as a negotiating tactic; albeit, a bad one. And across the board, across the U.S., from America’s heartland to big city corner grocery stores, you – the reader, the consumer, are in for several months or longer of a lousy financial ride.

Oh, and then there is the minor issue of ending a trade war this administration started. Do we just wake up one morning and – poof – prices return to former low levels because the tariffs are gone? That’s a fairytale ending that won’t end that way. Once a company is getting their higher price, they will be loathe to swiftly back down to lower prices and take a hit on profits. Why should they – if the buyer is already conditioned to the higher price, they will keep the price high until competition forces them to lower their price, unless that price battle has been negotiated away in the bilateral trade deals. So, regardless of when this trade war ends, it will not end well for the American consumer who will continue to pay the price for years, if not decades, to come. In many cases, all this will do is make things more expensive forever. When did car prices return to 1990 levels? When did food prices recede to what they were a decade or two ago? Are component parts, sheet metal and aluminum going to revert to pretariff prices? Those ships didn’t simply sail – they hit the reefs and sank. “Those who do not learn history are doomed to repeat it” -George Santayana. Well, now you know how we got here! Enjoy this issue of Metals & Manufacturing Outlook Lewis A. Weiss Publisher


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MANUFACTURING OUTLOOK     BY ROYCE LOWE

THE U.S. AND CANADA STILL RACING AHEAD OF THE GLOBAL MANUFACTURING PACK, WITH EUROPE PRESENTLY FALTERING.

OUTCRIES GALORE IN THE U.S. AT TRUMP’S TARIFFS. GLOBAL CRUDE STEEL PRODUCTION STILL ON THE UP.

As of late June, Trump’s tariffs had generated $582 million from steel imports, $195 million from aluminum imports. On July 6, at 12:01a.m. Washington time, just after midday in Beijing, an additional 25 percent tariff was levied against $34 billion worth of Chinese goods, from farming plows to semiconductors to airplane parts, with a further $16 billion likely to follow in two weeks. Trump says the final total could reach $550 billion, a figure exceeding all of U.S. goods imports from China in 2017. China has retaliated and automobiles will be hard hit.

The Global manufacturing PMI eases back to an eleven-month low.

The BLS jobs report for June shows the addition of 213,000 non-farm payroll jobs, and an increase in the unemployment rate from 3.8 percent in May to 4.0 percent. Some 36,000 new jobs were added in manufacturing, mostly in durable goods. There were job gains in fabricated metal products (7,000); computer and electronic products (5,000) and primary metals (3,000). Motor vehicles and parts added 12,000 jobs. Over the past 12 months 285,000 jobs were added in manufacturing. The ISM PMI figure for U.S. manufacturing rose to 60.2 percent in June from 58.7 percent in May, representing the 22nd consecutive month of growth in manufacturing. The overall economy grew for the 110th

consecutive month. There are strains on supply chains and on availability of qualified personnel. See NORTH AMERICAN OUTLOOK. IHS Markit’s remarks on the U.S. puts the PMI, at 55.4 percent in June, down from May’s 56.4, a four-month low, with manufacturing growth remaining strong. Production was up at a slower but still solid pace, and new order growth rose at its softest pace since November 2017.

Suppliers’ delivery times lengthened to the greatest extent in the series history. Tariff effects were cited as responsible for a further sharp rise in input prices.

There were solid increases in backlogs and job creation was the fastest in four months. The five ISM components are

| July 2018


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Metals & Manufacturing Outlook

equally weighted at 20 percent each. The IHS Markit components are weighted: 30 percent New Orders, 25 percent Production, 20 percent Employment, 15 percent Supplier Deliveries and 10 percent Raw Materials Inventories. The Bureau of Economic Analysis recently released its ‘third’ estimate for the annual rate of real GDP growth in the first quarter of 2018, putting it at 2.0 percent. The figure for the fourth quarter of 2017 was 2.9 percent. World crude steel production for the 64 reporting countries – which represent 99 percent of world crude steel production - for the month of May was 154 856 Mt, up 6.6 percent y-o-y. Capacity utilization for the month was 77.7 percent, up 4.2 percent on May 2017 and up 1.0 percent on April 2018. U.S. crude steel production for May 2018 was 7.107 Mt, up 3.0 percent y-o-y.

Primary Global Aluminum Production in May 2018 was reported at 5.441 million tonnes, with production in China, at 3.09 million tonnes representing almost 57 percent of world total. Production was 458,000 tonnes in GCC; 371,000 tonnes in rest of Asia ; 315,000 tonnes in Western Europe; 321,000 tonnes in North America and 345,000 tonnes in Eastern and Central Europe. Non-ferrous metal prices dropping. See METALS OUTLOOK.

‘Tariffitis’ : GM and many other auto companies and countries ‘displeased’ at what Trump’s doing. See AUTOMOTIVE OUTLOOK and ISSUES OUTLOOK.

| July 2018

U.S. LIGHT VEHICLE SALES The SAAR (Seasonally Adjustes Annualized Rate) for U.S. light vehicle sales was at 17.38 million in June, up 3.1 percent y-o-y. General Motors will no longer publish its monthly sales figures, stating that they are not a true representation of its overall market. It will instead report quarterly figures. For the second quarter of 2018, GM’s sales were 758,376, up 4.6 percent y-o-y. Figures for other major companies are as follows:

June 2018

% change

Ford 230,635 1.2

Comments

SUVs up 8.9%; pickups and vans up 3.2%; pass. Cars down 14%.

FCA 202,264 8.0

Jeep up 18.9%; Fiat down 36.4%; Chrysler down 31.7%

Toyota 209,602 3.6

Pickups, SUVs and crossovers up 13.7%; cars down 9.2%

Honda 146,563 4.8

P/ups, SUVs, C/overs up 12%; cars down 2.4%

Nissan 145,096 1.2

P/ups, SUVs, C/overs up 9.7%; cars down 7.5%

Hyundai/Kia 120,623

9.0

VW Brand

5.7

28,941

Audi brand up 0.3%

Manufacturing Laughs


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THE ECONOMIST magazine, in its latest weekly report on world economies, highlights changes in Gross Domestic Product (GDP), Industrial Production, Consumer Prices and Unemployment Rates for what it considers the world’s major economies. These data are not necessarily good to the present day, but are mostly applicable to at latest the past two months, and show definite trends in the world economy. The figures are qualified as being the latest available, and with reference to a given quarter or month. The figures for GDP represent the % change on the previous quarter, annual rate. The industrial production figures represent year-on-year changes, as do the consumer prices increases. The unemployment figures, %, are for the month as noted.

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Most people have heard that women are 51% of the U.S. population and only 27% of employees in manufacturing. But there is so much more to this story than a few statistics. To bring the story to life, the Manufacturing Broadcasting Corporation (MBC), broadcasters of Manufacturing Talk Radio has launched Women And Manufacturing, an exciting new show where accomplished women interview accomplished women who can share their experiences and encourage women to look across the broad landscape of manufacturing, from the loading dock doors to the C-Suite, and the expanse of jobs and careers in between, to learn more about this exciting sector of the U.S. economy and what it might hold for them. Never before has the manufacturing industry been in such an accelerated state of change, from retirees leaving the workforce creating a serious skills gap and brain drain to the implementation of the technological innovations of modern manufacturing often referred to as Industry 4.0, or the 4th Industrial Revolution. The hosts of Women And Manufacturing, all successful women in their own right, will interview women who are in the midst of a successful career in the industry and their respective companies, providing the guests with an opportunity to give guidance, insight, and inspiration to women who may or may not have considered a career in the industry, from teenagers just beginning to think about their career path to women in the industry or in transition in their own professional lives. The subject matter of the interviews will cover the spectrum of unique challenges any woman might face in the workplace or the industry from the success and accomplishments of women from the shop floor to the C-suite, from executive management to labor unions, and from educational to governmental institutions. Each will share their thoughts in congenial, collegiate conversations with one of 6 hosts who will alternate each week. Hosts will also tease out insights through guest introspection, along with suggestions and recommendations from guests to listeners about navigating the manufacturing and corporate world. Tune in to each episode to hear the accomplished women share their experiences with this generation and the next generation of women who will make and remake manufacturing for the generations who follow in this noble profession which contributes to the greater good of all, improving products, making things better and safer, and fulfilling lives – not just making a living. All of us involved with Women And Manufacturing appreciate your listenership and look forward to your feedback as this incredibly exciting show develops. Visit WOMENANDMFG.COM for more information. | July 2018


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NORTH AMERICAN OUTLOOK     BY ROYCE LOWE

The Latest Manufacturing Reports from the United States, Canada and Mexico The Institute of Supply Management PMI figure took quite a leap from 58.7 percent in May to 60.2 percent in June, representing the twenty-second consecutive month of growth in manufacturing. There was growth in the overall economy for the 110th consecutive month. Of the 18 manufacturing industries, 17 reported growth in June, in the following order: Textile Mills; Wood Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; Transportation Equipment; Furniture & Related Products; Machinery; Primary Metals; Miscellaneous Manufacturing;

Chemical Products; Petroleum & Coal Products; and Plastics & Rubber Products. No industry reported a decrease in June compared to May. Comments from the manufacturing industries continue to be positive. The manufacturing economy is in good shape, but there are concerns regarding trucking, delivery delays, availability of suitable personnel, steel and aluminum tariffs – one respondent spoke of a recent 20 percent increase in steel prices – and tight material supplies. Following is a summary of the five major indexes, each weighted at 20 percent in calculation of the PMI number for June; May’s readings are in parentheses: New orders 63.5 (63.7) Production 62.3 (61.5) Employment 56.0 (56.3) Supplier Deliveries 68.2 (62.0) slowing, faster Inventories 50.8 (50.2) The following five components are not instrumental in the PMI calculation, but are an important part of the manufacturing industry: Customer Inventories 39.7 (39.6) too low Prices 76.8 (79.5) Backlog of orders 60.1 (63.5) New export orders 56.3 (55.6) Imports 59.0 (54.1) | July 2018


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Metals & Manufacturing Outlook

Commodities Up in Price Aluminum (20); Aluminum Based Products (2); Butadiene; Capacitors; Caustic Soda (12); Copper (8); Corrugate (21); Corrugated Boxes; Diesel; Freight (5); Hydraulic Hoses/Fittings; Hydraulic Valves; Isopropyl Alcohol; Natural Gas; Nylon; Packaging Materials; Paper (2); Phosphoric Acid; Plastic Components; Plastic Resins; Polypropylene; Resistors (2); Rubber; Solvents; Steel — Cold Rolled; Steel — Galvanized; Steel — Hot Rolled (19); Steel — Stainless (3); Steel Based Products (2); Steel Tubing; and Wood Pallets. Commodities Down in Price None Commodities in Short Supply Aluminum (2); Capacitors (12); Electrical Components (3); Electronic Components (2); Freight (2); Resistors (8); Steel Based Products (2); and Steel — Hot Rolled (3). Note: The number of consecutive months the commodity is listed is indicated after each item.

| July 2018

The complete ISM Report on Business may be found at the end of this MMO report. CANADA saw its manufacturing PMI at its highest level since this survey began in October 2010, with the figure for June, at 57.1, up from May’s 56.2. There were strong increases in production, new orders and employment, and backlogs of work were up at a survey-record pace. There were also continuing supply chain pressures, contributing to the greatest accumulation of unfinished work since October 2010. An increasing demand for raw materials and higher prices for metals led to the fastest increase in average cost burdens in over seven years. Quebec remained the best performing region, helped by a record rise in production. Manufacturing employment growth was strongest in Quebec, followed by Alberta and B.C. All regions recorded steep and accelerated

rates of input price inflation in June. Canada produced 1.145 Mt of crude steel in May, up 14.3 percent y-o-y. Canadian light vehicle sales in June were off for the fourth straight month, down 1.6 percent y-o-y. Passeneger car sales were down 8 percent to 61,153 units, and light truck sales, some 69 percent of total sales, were up 1.4 percent to 139,003 units, MEXICO saw rises in production in June, supported by a strong increase in new orders and the strongest expansion in employment for 32 months. There was improved demand, both domestic and export. The PMI for June was up at 52.1 from May’s 51.0 figure. There is optimism in the Mexican manufacturing sector for the next twelve months. Mexico produced 1.800 Mt of crude steel in May, up 3.4 percent y-o-y.


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METALS OUTLOOK

BY ROYCE LOWE

THE COST, MAKING, TREATING AND APPLICATIONS OF METALS. Hot-rolled and cold-rolled steel prices in the U.S. are still rising, with recent pricing for H.R. Band at $907/ton, C.R. Coil at $1012/ ton and rebar at $725/ton. Mainland China sees prices at (the equivalent of) $559/ton for H.R. Band, $563/ton for C.R. Coil and $487/ton for rebar. Western Europe quotes $589/ton for H.R. Band. India’s number one steelmaker, JSW Steel Ltd. is looking to find more places to put its dollars in the U.S. and Europe to add to its expansion at home. The company has met half its target for 10 million tons of overseas capacity and is now looking to buy more. It has tripled output at its Texas plant and has bought

another U.S. facility in Ohio. JSW Steel produced 15.8 million tons of crude steel in the year to March 31, up 26 percent y-o-y., and plans to boost capacity to some 25 million tons by 2020. American Axle & Manufacturing (AAM) will supply power transfer units (PTUs) for Ford Motor Co. crossover vehicles with allwheel drive (AWD) starting with the 2019 Ford Edge and Lincoln Nautilus. The new contract expands AAM and Ford’s relationship while supporting global growth in the crossover segment. The PTU is part of AAM’s family of EcoTrac Disconnecting AWD solutions, which include disconnecting PTUs, multi-piece driveshafts, rear drive modules with electronic control units and torque transfer devices. AAM will manufacture EcoTrac in several facilities, including Three Rivers, Mich.;

Guanajuato, Mexico; Changshu, China; and Świdnica, Poland. SMS group received a contract from Avic Guizhou Anda Aviation Forging Co., a Chinese Aerospace company, to supply an additional ring-rolling machine. It will be installed at the company’s plant in Anshun, China. Production is scheduled for mid-2019. The new ring-rolling machine is capable of rolling seamless rings with diameters up to 98.5 inches (2,500 mm) and a maximum height of 31.5 inches (800 mm). Non-ferrous metal prices saw aluminum at around $1.05 per pound in early June, $0.93 in early July; copper at around $3.30 per pound in early June, $2.90 in early July; nickel at around $7.10 in early June, $6.40 in early July; zinc at around $1.45 per pound in early June, $1.25 in early July. | July 2018


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AUTOMOTIVE OUTLOOK   BY ROYCE LOWE

GM warns that increased tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less – not more – U.S. jobs. This is in reference to the application of tariffs on imported vehicles and auto parts, where the administration is considering auto tariffs of up to 25 percent. All major carmakers, including GM and Ford, import a substantial share of the vehicles they sell in the U.S.. Levies on parts would strongly affect such models as the Ford F-150 pickup and the Toyota Camry Sedan by the imposition of heavy price boosts. There have been outcries regarding tariffs on imported cars and parts from GM, Ford, Toyota, Nissan, BMW, Daimler, | July 2018

VW, Hyundai, Volvo, JLR, Mazda, Magna, Valeo and Borg Warner. In other words, from all who ensure employment to American workers in the auto and auto parts industries. According to researcher LMC Automotive, a 25 percent tariff on imported vehicles may cost the U.S. auto industry one million annual sales, assuming the automakers would absorb at least half the cost of a tax on imported vehicles. If the companies pass on the full 25 percent, it could do away with two million sales, or over 10 percent of annual U.S. vehicle deliveries. Automakers, dealers and Republican lawmakers are all against it. Is this chest-thumping bravado, or just a natural step for Trump after the steel and aluminum tariffs? If there is follow-through on this 25

percent tariff, U.S. consumers might likely buy cheaper, domestic cars, buy used cars or just postpone buying a car. The investigation into auto imports is being carried out under section 232 of the Trade Expansion Act of 1962, the same power Trump used to impose global tariffs on imported steel and aluminum. GM is coincidentally ignoring Trump’s call for U.S. jobs by building the resurrected Chevrolet Blazer at its plant in Ramos Arizpe in Mexico. This is a big disappointment to the UAW, who say GM employs over 15,000 production workers in Mexico at $3/hour. GM sells over 80 percent of its Mexico-made vehicles to the U.S. and Chevrolet is expected to


Metals & Manufacturing Outlook import some 780,000 vehicles in 2018, mostly from Mexico. GM chose to make the Blazer in Mexico because the company was planning the vehicle years ago when all its SUV plants were running on three shifts. The Ramos Arizpe plant was the only one with enough capacity for the Blazer. Tesla, that you-can’t-keepme-out-of-the-news company, is in the news for a 9 percent workforce cut, almost all salaried employees and no production associates included. The company is looking for its first annual profit. Then there’s the story of the disgruntled, promotion-denied employee who broke into the company’s manufacturing operating system and sent highly sensitive data to unknown third parties.

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And third, in the last week of quarter two, Tesla reported having reached its goal of producing 5,000 model 3 sedans, of which some 20 percent came off a line built under a tent outside its California assembly plant. Can they keep it up, and where to from here? But that’s not quite all. Norway, where 8,500 Teslas were sold last year, is complaining about the service network for the cars in their country. Elon Musk says they’re quite right to complain, and that he’ll fix things. Norway, it might be added, is Europe’s second-largest market for EVs, behind only Germany. Norway had a population of 5.2 million in 2016.

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AEROSPACE OUTLOOK     BY ROYCE LOWE

Airbus SE has sealed its deal for control of Bombardier’s C series, giving a boost to a plane that’s technologically up there, commercially in some trouble. Airbus will hold the majority share in the partnership, with the deal set to close July 1. The C series was beset with budget and late delivery problems. Boeing, meanwhile, and Brazil’s Embraer, have formed a $4.75 billion commercial jet venture, allowing them into battle against Airbus in the market for 100-seat planes. Boeing took orders ahead of the upcoming airshow, with a commitment from Vietnam’s Bamboo Airways for 20 787-9 Dreamliners for some $5.6 billion, and from Jet Airways India Ltd. for 75 737 MAX for some $8.8 billion. Rolls Royce is suffering a parts shortage needed to repair | July 2018

hundreds of faulty engines for the Boeing 787, according to sources who ask not to be named since the extent of the problem has not been made public. Rolls and its suppliers are stretched by record orders. Rolls is upping output of engines for the Airbus A350 and the A330neo; Boeing plans an increase in the 787 production rate in 2019. Boeing has sent out key personnel to support Rolls in their efforts to work through this problem. Some 60 percent of 787s have been ordered with General Electric Co. engines that are not prone to similar problems, namely a deterioration of turbine blades.


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ISSUES OUTLOOK

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BY ROYCE LOWE

United Technologies Corp (UTC) recently announced its intention to hire 35,000 people in the U.S. The company presently employs 200,000 people – in 75 countries – of which 67,000 in the U.S. Many of the 35,000 new hires are a result of retirement and normal turnover, but there will be several thousand new positions too. There will be support for the more than $15 billion the company will invest in R&D and capital expenditures over the next five years. UTC says it plans a further $75 billion with U.S. suppliers. CEO Gregory J. Hayes, in announcing these new investments, stressed the need for a highly-skilled workforce and workforce education programs to back up the company’s worldclass manufacturing facilities.

“ We will not escalate and we will not back down. The measures are ‘illegal’ and America has a trade surplus with Canada on iron and steel. Thus was Canada’s response to Trump’s tariffs on steel and aluminum. Canada’s government finalized tariffs on $U.S.12.6 billion of American goods and pledged money to support companies and workers hurt by the U.S. levies on Canadian steel and aluminum exports. The 25 and 10 percent tariffs on steel and aluminum will remain in effect until the U.S.

eliminates its same tariffs on Canadian steel and aluminum. And it goes beyond automobiles. The CEO of MillerCoors says he can’t just go to shareholders and tell them his profit’s going to drop by $40 million. Do they put up the price of beer? What about the 6,000 small breweries. The company just spent tens of millions on a new Milwaukee plant and are wondering if they would have done that if they’d known what was coming.

Manufacturing Laughs

Half the hiring will be in production and maintenance roles, with the other half in engineering and technology development roles. Since 1996, UTC has run an Employee Scholarship Program, with over 39,500 degrees earned by employees in 60 countries. These are offered to employees at no cost, with an average company contribution at $37,000 per participant. | July 2018


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ENERGY OUTLOOK

BY ROYCE LOWE

The American Council for an Energy Efficient Economy (ACEEE) ranked Italy and Germany as tying for first place in the biennial worldwide energyefficiency race. France, the UK and Japan followed suit. The U.S. fell from 8th to 10th in this new ranking of the world’s 25 largest energy-consuming countries, due in part to its decision to pull out of the Paris Climate Agreement. Saudi Arabia and the United Arab Emirates ranked lowest. The countries ranked by the ACEEE represent 78 percent of global energy consumption. The report considered each country’s efforts regarding buildongs, industry, transportation and overall national energy efficiency progress.

| July 2018


Metals & Manufacturing Outlook

GLOBAL OUTLOOK

BY ROYCE LOWE

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and investment goods sectors. Supply chain pressure and rising oil prices pushed input cost inflation to a four-month high. Crude steel production in Germany in May was at 3.900 Mt, up 2.6 percent y-o-y; in Italy 2.180 Mt, up 3.7 percent y-o-y; in France 1.333 Mt, down 6.5 percent y-o-y and in Spain 1.337 Mt, up 7.0 percent y-o-y. Russia’s crude steel production for May was at 6.230 Mt, up 6.0 percent y-o-y; Ukraine’s was 1.695 Mt, up 2.9 percent y-o-y. Car sales in Western Europe in June were up 4.2 percent in Germany, 9 percent in France, 8 percent in Spain; but down 7.3 percent in Italy.

EUROZONE

IHS Markit’s Eurozone Manufacturing Composite Purchasing Managers’ Index (PMI) eased again in June, this time to an 18-month low of 54.9 from May’s 55.5 figure. There was a further slowing in growth in production and new orders as new export business remained subdued. The rates of

expansion in production and new orders were at their weakest since November 2016 and August 2016 respectively. Business optimism reacted accordingly and dropped to its lowest level in two-and-ahalf years. Increased backlogs led to continued increases in manufacturing employment in June, with expansions registered across consumer, intermediate

IHS Markit’s PMI for the UK was up very slightly in June at 54.4, effectively unchanged from May’s 54.3 figure. Production growth slowed from May’s five-month high and input cost inflation increases were accompanied by higher selling prices. Production and new orders rose across the consumer, intermediate and investment goods industries, and the month of June saw a solid improvement in the rate of job creation. Business optimism was positive in June, but there is concern over input price increases and possible future trade tariffs, exchange rate and Brexit uncertainty. The supply chain is being disrupted by material shortages and increases in price inflation. UK car sales were down 3.5 percent in June, with diesel sales down 28.2 percent. The UK produced 0.582 Mt of crude steel in May, down 5.7 percent y-o-y. | July 2018


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GLOBAL OUTLOOK

BY ROYCE LOWE

ASIA

Production increased at the quickest pace for four months in June in CHINA’s manufacturing sector, with the seasonallyadjusted PMI falling very slightly from May’s 51.1 to 51.0 in June. There was also sustained growth in new orders, but new export sales were down for the third consecutive month, and employment was down at the quickest pace in 11 months. Inflationary pressures picked up at the end of the second quarter. China’s goods producers are

Manufacturing Laughs

optimistic that production levels will rise over the coming year. CHINA produced 81.127 Mt of crude steel in May, up 8.9 percent y-o-y; Japan 9.093 Mt, up 1.8 percent y-o-y; India 8.822 Mt, up 7.6 percent y-o-y and South Korea 6.227 Mt, up 3.0 percent y-o-y. Taiwan produced 1.715 Mt in May, down 14.4 percent. China sold 1.85 million passenger cars in May, an 8.5 percent gain y-o-y., with a year-to-date gain of 6.75 percent on ytd sales of 9.76 million. The Seasonally Adjusted Annualized selling Rate is at 24.4 million vehicles.

In June, JAPANESE manufacturers saw a moderate improvement in the sector, with production and employment increasing faster, but new export orders declining for the first time since August 2016. The June PMI was at 53.0, up from May’s 52.8. Total new orders rose at the slowest pace in 10 months, but the overall growth of new work kept pressure on operating capacities, with backlog work up at a sharper pace. Sharper input price inflation triggered the largest increase in selling prices in five months. There were raw material shortages, and the increased costs of oil and metals led to a three-and-a-half year high rise in inflation. The outlook is still positive. INDIA’s PMI was up in June at 53.1 from May’s 51.2, with production and new orders increasing at the fastest pace so far this year. Job creation was up to its strongest rate so far in 2018, and was evident across the consumer, intermediate and investment goods sectors. New export orders were up for the eighth consecutive month, amid a stronger demand from key international markets. Steel and fuel were key items in raw material price increases.

| July 2018


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GLOBAL OUTLOOK

BY ROYCE LOWE

SOUTH AMERICA BRAZIL saw a truckers’ strike effectively take away most of what its manufacturing sector had gained over the past months, with production and new orders falling for the first time in 16 months and accompanying further deterioration in delivery times. The PMI for June was at 49.8, down from May’s 50.7. Input costs rose at the secondfastest rate in the survey history. Coincidentally, export demand for Brazilian goods improved, with export sales up at the quickest rate since last November. Brazil’s crude steel production for the month of May was 2.678 Mt, a decrease y-o-y of 8.6 percent. The JP MORGAN GLOBAL MANUFACTURING PMI – a composite index produced by JPMorgan and IHS Markit in association with ISM and

IFPSM (International Federation of Purchasing and Supply Management) – dropped to an 11-month low in June of 53.0, down from May’s 53.1. Global manufacturing production rose at its slowest since July 2017, as the growth of new orders fell back to a 19-month low, partly a result of subdued international trade, with new export orders rising only slightly. On average, developed markets saw a modest increase in new export business, emerging markets a decline for the third consecutive month. Global manufacturing employment was up for the 22nd successive month in June, with the rate of job growth improving for the first time in 2018. There were increased price pressures in June, with both input costs and selling prices up at faster rates.

May

June

Global PMI

53.1

53.0

Production

53.4

53.2

New orders

53.4

52.9

New exports

50.7

50.5

Employment

51.8

52.1

Input prices

60.7

62.2

Output prices

54.4

55.0

‘Future Output’

63.9

61.9

ISO9001:2008 and AS9100C

| July 2018


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Metals & Manufacturing Outlook

MANUFACTURING-

THE BELLWETHER SECTOR     BY TIM GRADY        As we watch this economy roll along as the second-longest economic expansion since we measured such things, we see wonderful positives in the manufacturing sector: plant expansions and new plant construction by dozens of companies that all cite the recent reduction in government regulations and the tax act as the impetus, the lowest unemployment figures in most people’s living memory across all ethnic, race, and gender groups, the highest quarter-byquarter GDP numbers since the 2016 election compared to the previous 10 years with months of May and June above 4% for the first time in decades, the Purchasing Manager’s Index (PMI) issued by the Institute for Supply Management (ISM) rolling up each month in the high 50’s or low 60’s for the nation as a whole, the regional and international PMI numbers in the 50’s and 60’s, with wages and productivity continuously rising. Researching each of the expansions and recessions since 1940 shows that manufacturing has always led the country out of a recession. It is the first industry to show expansion as an entrenched economy turns around. Here are some interesting indicators within manufacturing that make it the bellwether sector for the U.S. economy. | July 2018

New Orders and Production As the economy recovers from a recession, new orders flowing into manufacturing pick up. The Institute for Supply Management posts the New Orders number each month as part of their Manufacturing Report on Business® that tallies the Purchasing Managers Index (PMI). Those new orders take 6 to 18 months to complete from initial order to goods shipment. Manufacturers have to look out months into the future and begin to ramp up hiring and buying to fulfill the demand for their goods. Not all of the 18 industries within the manufacturing sector recover at the same speed or time, but enough recover in unison to indicate a turnaround in the economy as the ISM number rolls up above 50 and begins to consistently stay above 50. Employment As manufacturers hire, even though the sector is recorded as only 12% of the overall economy, the unemployment number begins to fall. In actuality, the federal government measures employment in manufacturing as those employees on the production line. It classifies all other employees into the service sector, or nonmanufacturing. Of course, all the employees at large

manufacturers within the auto industry or heavy machinery would be surprised to learn that they are not in manufacturing, but it is how the government measures things, so what can you expect? If you include all the employees that work at manufacturing companies, you can conclude that more than 30% off all employed people work in the sector, which indicates that manufacturing in total in more like 30% of the economy. So, any shift in manufacturing employment has a definite impact on the unemployment number issued by the federal government known as U3. That number for June 2018 is 4.0% - more on that later. For years, employment was looked upon as a laggard indicator; it fell after a recession began. My own research indicates otherwise. I contend that employment is a leading indicator, which begins to fall months before an actual recession is declared by the government, which looks at the data after the facts are in. If you lay out each month of the expansions and recessions since 1940 on a graph and then lay out U3 unemployment, you will notice something interesting. Employment begins to fall several months before each of the recessions in recent history. This is no coincidence. continued on page 20


Metals & Manufacturing Outlook

19


20

Metals & Manufacturing Outlook

continued from page 18 Manufacturers looking at their order books see the first indications of falling demand as new orders recede. At that point, they begin to plan how to manage one of the largest expenses on their income statement after cost of goods sold – the cost of employees. Remember that this includes employee salaries and hourly wages, the employer share of payroll taxes, employee benefits, and the operating cost of each employee – the desk they sit at, the computer they use, the printers, copiers, lights, physical space and other cost and expense factors to support the activity of an employee. The general rule is that each employee costs the company about 1.5 times that employee’s salary or total annual hourly wages, all factors weighed in. So, as new orders wane, manufacturers begin to thin staff because they can forecast the amount of labor needed or not needed for future production. That has ripple effects upstream and downstream within the company, including, but not limited to purchasing, planning, research and development, engineering, shipping and receiving, as well as overall management. Employees that are laid off become part of the U3 unemployment number, although the government won’t report it until a month after the fact when they look at, compile and report the data each month. Thus, several months will elapse before an economic trend begins to reveal itself in the unemployment numbers when reported by the government. However, manufacturing, and also non-manufacturing, will have been thinning their ranks months before the government reports a recession which is defined as two consecutive quarters of economic contraction in the GDP. And, they may not report this until the eighth month after a recession began because all the data isn’t in, tabulated and adjusted until well after the fact. Economic Downturn So why is this important? Because the government just reported that | July 2018

U3 unemployment ticked up to 4.0% at the time of this writing. It may be nothing more than people shifting jobs, confident that they can find a better paying one as the good times currently roll. One month does not make a trend or indicate that a recession is just around the corner, but this economy is the second-longest economic expansion in modern history and no expansion continues forever. We are beginning to see inflation in the price of goods and services, although food prices have been increasing significantly for several years now. The Fed is ratcheting up interest rates to tamp down inflation – what actually happens is that the Fed makes borrowing more expensive and then companies slide expansion plans to the back burner. New orders for plant and equipment begin to wane, and hiring stagnates or tops out. Then the only way forward from there is downward. This is an over-simplification without a lot ancillary relevant details, but it is generally the trend. Two other elements to watch which can be seen in the ISM’s Manufacturing Report on Business® are Supplier

Manufacturing

Deliveries and Inventories. As order books cool, manufacturers buy less and stock fewer raw materials and component parts for their production needs. Supplier deliveries, which run slow in periods of high demand and expansion, begin to catch up and those two indices begin to creep below 50 in the report. At that point, employment, new orders and production may all be headed south, and although the ISM reports that any consolidated number above 43 indicates expansion, the real mojo where companies and employees feel good vibes occurs where that monthly number is above 50 and GDP is at 2% or greater. 2019 As future months pass, keep an eye out for early indicators within manufacturing, and any monthby-month steady upward climb in the U3 unemployment number. This expansion isn’t over yet, but it will wane in 2019 if the trade war heats up. Without a trade war, this economy could have rolled into 2020, but that ship has sailed unless the current administration gets a bilateral trade deal with China and the tariff dogs of war are put back in their respective cages.


Metals & Manufacturing Outlook

GLOBAL PMI OUTLOOK

21

BY NORBERT ORE                                    The global economy is “tariff-ic” this month. 16 of the 18 surveys we closely follow remained in expansionary territory in June. Only underperformers South Korea (49.8, +0.9) and Brazil (49.8, -0.9) failed to grow. The JP Morgan Chase Manufacturing PMI™ (which summarizes the data from 44 countries) posted a 53.0 which is slightly lower from last month and the lowest reading since July 2017. The data still paints a picture of widespread expansion, but affected companies appear to be focused on the impact of present and possible future tariffs as 38% of the comments in the ISM Manufacturing survey mentioned tariff concerns. Supply chains as well as financial markets do not handle uncertainty very well.

Eurozone: The Eurozone PMI (54.9, -0.7) continues to unwind from its December 2017 peak (60.6), but does remain in a range

that stimulates growth. Yes, the rate of growth has slowed, but the PMI has remained above the 54-mark for 19 consecutive months now. The EZ’s manufacturing expansion continues to be led by Netherlands (60.1, -0.2) and, to a lesser extent, by Ireland (56.6, +1.1), Austria (56.6, -0.7), and Germany (55.9, -1.0). The four remaining countries averaged 53.2 percent for the period which is still sufficient to encourage investment and employment. United Kingdom: The UK/CIPS PMI (54.4, +0.1) continues to produce respectable readings postBrexit. In June, the PMI remained in expansionary territory for the 23rd consecutive month. China: China’s Official Report, the CFLP PMI (51.5, -0.4), reported

a slight strengthening at 51.0+ in the last four months. The Caixin China General Manufacturing PMI (51.0, -0.1) shows a similar rate of expansion averaging 51.1 for the same period. The trend from both surveys is for continuing growth consistent with the trend started in early 2016. India: India’s PMI (53.1, +1.9) accelerated slightly, posting its 11th consecutive month of growth. Overall, the economy is growing and the stage appears set for further expansion. North America: Canada (57.1, +0.9) expanded for the 28th consecutive month with sharp rises in new orders and production. Mexico’s PMI (52.1, +1.1) printed above its 1H 2018 average of 51.9.

| July 2018


22

Metals & Manufacturing Outlook

THE INSTITUTE FOR SUPPLY MANAGEMENT’S MANUFACTURING REPORT ON ® BUSINESS

BREAKING NEWS

ISM PMI at 60.2% ISM PMI for the past 5 years

| July 2018


Metals & Manufacturing Outlook

23

ISM® REPORT ON BUSINESS®

MANUFACTURING E

conomic activity in the manufacturing sector expanded in June, and the overall economy grew for the 110th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

The June PMI® registered 60.2 percent. The New Orders Index registered 63.5 percent, a decrease of 0.2 percentage point from the May reading of 63.7 percent. The Production Index registered 62.3 percent, a 0.8 percentage point increase compared to the May reading of 61.5 percent. The Employment Index registered 56 percent, a decrease of 0.3 percentage point from the May reading of 56.3 percent. The Supplier Deliveries Index registered 68.2 percent, a 6.2 percentage point increase from the May reading of 62 percent. The Inventories Index registered 50.8 percent, an increase of 0.6 percentage point

JUNE 2018 Analysis by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® Manufacturing Business Survey Committee

from the May reading of 50.2 percent. The Prices Index registered 76.8 percent in June, a 2.7 percentage point decrease from the May reading of 79.5 percent, indicating higher raw materials prices for the 28th consecutive month. Of the 18 manufacturing industries, 17 reported growth in June, in the following order: Textile Mills; Wood Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; Transportation Equipment; Furniture & Related Products; Machinery; Primary Metals; Miscellaneous Manufacturing‡; Chemical Products; Petroleum & Coal Products; and Plastics & Rubber Products.

PMI @ 60.2% ®

‡Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

MANUFACTURING AT A GLANCE Jun Index 60.2 63.5 62.3 56.0 68.2 50.8 39.7 76.8 60.1 56.3 59.0

May Index 58.7 63.7 61.5 56.3 62.0 50.2 39.6 79.5 63.5 55.6 54.1

% Point Change +1.5 -0.2 +0.8 -0.3 +6.2 +0.6 +0.1 -2.7 -3.4 +0.7 +4.9

Growing Growing Growing Growing Slowing Growing Too Low Increasing Growing Growing Growing

Rate of Change Faster Slower Faster Slower Faster Faster Slower Slower Slower Faster Faster

Trend* (months) 22 30 22 21 21 6 21 28 17 28 17

OVERALL ECONOMY

Growing

Faster

110

Manufacturing Sector

Growing

Faster

22

Index PMI® New Orders Production Employment Supplier Deliveries Inventories Customers’ Inventories Prices Backlog of Orders New Export Orders Imports

Direction

*Number of months moving in current direction. Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Supplier Deliveries Indexes.

PMI 2016

2017

2018

60.2%

50% = Manufacturing Economy Breakeven Line

PMI® Manufacturing expanded in June as the PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent. This indicates strong growth in manufacturing for the 22nd consecutive month, led by continued expansion in new orders, production and employment. The PMI® reached its highest level since February 2018, when it reached 60.8 points. However, inventories continue to struggle to maintain expansion levels as a result of supplier deliveries slowing further.

43.2% = Overall Economy Breakeven Line

COMMODITIES REPORTED Commodities Up in Price: Aluminum (20); Aluminum Based Products (2); Butadiene; Capacitors; Caustic Soda (12); Copper (8); Corrugate (21); Corrugated Boxes; Diesel; Freight (5); Hydraulic Hoses/Fittings; Hydraulic Valves; Isopropyl Alcohol; Natural Gas; Nylon; Packaging Materials; Paper (2); Phosphoric Acid; Plastic Components; Plastic Resins; Polypropylene; Resistors (2); Rubber; Solvents; Steel — Cold Rolled; Steel — Galvanized; Steel — Hot Rolled (19); Steel — Stainless (3); Steel Based Products (2); Steel Tubing; and Wood Pallets. Commodities Down in Price: None. Commodities in Short Supply: Aluminum (2); Capacitors (12); Electrical Components (3); Electronic Components (2); Freight (2); Resistors (8); Steel Based Products (2); and Steel — Hot Rolled (3).

12

Note: The number of consecutive months the commodity is listed is indicated after each item. *Reported as both up and down in price.

JUNE | JULY 2018

Reprinted with permission

| July 2018


24

Metals & Manufacturing Outlook

ISM Report On Business ®

®

manufacturing

June 2018 Analysis by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management ® Manufacturing Business Survey Committee

New Orders (Manufacturing) 2016

2017

New Orders

2018

ISM’s New Orders Index registered 63.5 percent. Sixteen of 18 industries reported growth in new orders in June, listed in the following order: Textile Mills; Furniture & Related Products; Wood Products; Printing & Related Support Activities; Transportation Equipment; Nonmetallic Mineral Products; Plastics & Rubber Products; Computer & Electronic Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Electrical Equipment, Appliances & Components; Machinery; Primary Metals; Miscellaneous Manufacturing‡; and Paper Products.

63.5% 52.4% = Census Bureau Mfg. Breakeven Line

Production (Manufacturing) 2016

2017

Production

2018

62.3%

51.5% = Federal Reserve Board Industrial Production Breakeven Line

ISM’s Production Index registered 62.3 percent. The 16 industries reporting growth in production during the month of June — listed in order — are: Textile Mills; Furniture & Related Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Wood Products; Chemical Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Petroleum & Coal Products; Miscellaneous Manufacturing‡; Machinery; and Paper Products.

Employment (Manufacturing) 2016

2017

Employment

2018

ISM’s Employment Index registered 56 percent. Of the 18 manufacturing industries, the 13 reporting employment growth in June — listed in order — are: Textile Mills; Paper Products; Computer & Electronic Products; Transportation Equipment; Petroleum & Coal Products; Primary Metals; Machinery; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Fabricated Metal Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing‡; and Chemical Products.

56% 50.8% = B.L.S. Mfg. Employment Breakeven Line

Supplier Deliveries (Manufacturing) 53.1% 2016

2017

2018

Inventories (Manufacturing) 2016

2017

Supplier Deliveries The Supplier Deliveries Index registered 68.2 percent. The 15 industries reporting slower supplier deliveries in June — listed in order — are: Wood Products; Textile Mills; Computer & Electronic Products; Fabricated Metal Products; Machinery; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Transportation Equipment; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing‡; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Chemical Products; and Primary Metals.

68.2%

53.1% 2018

50.8%

43% = B.E.A. Overall Mfg. Inventories Breakeven Line

| J u l y ‡Miscellaneous 2 0 1 8 Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).

Inventories The Inventories Index registered 50.8 percent. The 10 industries reporting higher inventories in June — listed in order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Wood Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing‡; Primary Metals; and Machinery.


Metals & Manufacturing Outlook

ISM Report On Business ®

®

manufacturing

25

June 2018 Analysis by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management ® Manufacturing Business Survey Committee

Customer Inventories (Manufacturing) 2016

2017

2018

39.7%

Customers’ Inventories ISM’s Customers’ Inventories Index registered 39.7 percent. No manufacturing industries reported customers’ inventories as too high during the month of June. The 14 industries reporting customers’ inventories as too low during June — listed in order — are: Wood Products; Apparel, Leather & Allied Products; Plastics & Rubber Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Miscellaneous Manufacturing‡; Fabricated Metal Products; Computer & Electronic Products; Paper Products; Food, Beverage & Tobacco Products; and Chemical Products.

Prices (Manufacturing) 2016

2017

2018

76.8%

52.4% = B.L.S. Producer Prices Index for Intermediate Materials Breakeven Line

Backlog of Orders (Manufacturing) 2016

2017

2018

60.1%

Prices The ISM Prices Index registered 76.8 percent. All 18 industries reported paying increased prices for raw materials in June, in the following order: Apparel, Leather & Allied Products; Textile Mills; Printing & Related Support Activities; Fabricated Metal Products; Furniture & Related Products; Paper Products; Machinery; Chemical Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Nonmetallic Mineral Products; Primary Metals; Wood Products; Miscellaneous Manufacturing‡; Transportation Equipment; Food, Beverage & Tobacco Products; Petroleum & Coal Products; and Plastics & Rubber Products.

Backlog of Orders ISM’s Backlog of Orders Index registered 60.1 percent. The 12 industries reporting growth in order backlogs in June — listed in order — are: Printing & Related Support Activities; Computer & Electronic Products; Textile Mills; Petroleum & Coal Products; Paper Products; Fabricated Metal Products; Transportation Equipment; Machinery; Primary Metals; Furniture & Related Products; Chemical Products; and Plastics & Rubber Products. The two industries reporting a decrease in order backlogs during June are: Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products.

New Export Orders (Manufacturing) 2016

2017

2018

56.3%

New Export Orders ISM’s New Export Orders Index registered 56.3 percent. The 10 industries reporting growth in new export orders in June — listed in order — are: Furniture & Related Products; Fabricated Metal Products; Chemical Products; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Miscellaneous Manufacturing‡; Machinery; and Transportation Equipment.

Imports (Manufacturing) 2016

2017

2018

59%

‡Miscellaneous

Imports ISM’s Imports Index registered 59 percent. The 14 industries reporting growth in imports during the month of June — listed in order — are: Printing & Related Support Activities; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing‡; Petroleum & Coal Products; Furniture & Related Products; Chemical Products; Transportation Equipment; Food, Beverage & Tobacco Products; Plastics & Rubber Products; and Machinery.

Manufacturing (products such as medical equipment and

supplies, jewelry, sporting goods, toys and office supplies).

| July 2018


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