Dallas Fed survey of manufacturers
- Prior was +9
- Production index at 24.2 vs 20.8 prior
- New orders 9.5 vs 15.6 prior
- Prices paid 80.4 vs 74.9 prior
- Wages and benefits 42.7 vs 43.4 prior
- Future index -2.8 vs 11.5 prior
Selected comments:
- We still cannot hire or find enough employees to be able to meet increasing demand. We would hire 20 today if we could. Demand just keeps increasing. Prices and lead times for shipments are at company historical highs.
- Inflation is here to stay.
- Labor shortages and raw material price increases and shortages continue to be major problems.
- We are seeing signs that business is settling in at about pre-COVID levels. Unfortunately, most of our raw materials are more costly, thus requiring us to increase pricing.
- The COVID-19 impact is still real.
- Demand continues to remain strong across almost all markets. There are clear signs that inventory is building while scarcity continues, with a few components limiting production broadly. I have no idea when an overbuild of inventory will happen but fully expect that it will.
- We still see escalation in costs and selling prices.
- We are experiencing severe increases in some raw-material prices and are unable to fill out some vacant positions, even at higher wages.
I want to highlight the bolded because I think it's one of the strongest bull cases for the next two years. That comment was in computer and electronic manufacturing but after this round of supply chain shortages, the 'on time' supply chain model is going to be changed. That means all companies will be building larger inventories, which will be a major tailwind for growth.
