- Prior was -13.5
Details:
- Production index +2.5 vs -2.8 prior
- New orders index -14.3 vs -13.2 prior -- 10th month in a row negative
- Growth rate of orders -15.2 versus -16.9 last month
- Employment +10.4 versus -1.0 last month
- Hours worked +2.6 versus +4.9 last month
- Capital expenditures +2.9 versus -1.3 last month
- Wages and benefits +30.5 versus +32.7last month
- Prices received +7.0 versus +15.8 last month
- Prices paid for raw materials +20.3 versus +25.1 last month
- Finished goods inventory +6.6 versus -3.0 last month
- Shipments -10.5 versus -5.0 last month
I would highlight the pricing sub-indexes here and their steady declines. That's bodes well for inflation.
Selected comments in the report:
- We continue to struggle to find qualified manufacturing employees. We are investing heavily in automation to increase productivity and allow us to meet demand without adding head count.
- We are closely monitoring the banking meltdown with customers and suppliers. There has been minimal impact so far.
- We expected things to cyclically slow, and all markets are correcting except auto. We expect once inventories reduce from elevated levels, we will begin to ship closer to end demand, likely mid-to-late second half 2023.
- Activity has picked up. We are cautiously optimistic regarding activity this year. Downward risk factors (inflation , workforce, and global security threats) are still more significant than the potential economic tailwinds.
- The current market upheaval with bank failures and inflation is still above acceptable levels and the main driver of my thoughts. How this is handled in the near term will impact the future exponentially. Higher interest rates could mean more bank failures. The government cannot insure all deposits in all the banks. I do not see any price pressure on raw materials in the near term. Labor is still a problem; finding and retaining good employees is challenging.
- We are holding steady at current revenue; however, there are many uncertainties that are causing us to be extremely cautious.
- Our outlook is horrible. The level of certainty is zero. Production is hand to mouth. We cannot find workers.
- We are laying off workers for the first time since 2010.
- We continue to see new orders coming in, sustaining the price increase we implemented due to increased labor and material costs. We hope this holds up but are worried that the slowdown we are seeing may create competitive pressures on maintaining price margins. It is still very tough to find employees wanting or willing to work. Perhaps we need to loosen up on immigration restrictions to help with this shortage of laborers.