Category: News

US Factory Orders Rose In May.

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Bloomberg News (7/6, Kowalski) reports, “Orders placed with US factories increased in May, indicating manufacturing may rebound from a slowdown in economic growth in the first half of 2011.” The Commerce Department found that “bookings for manufacturers’ goods rose 0.8 percent, less than forecast, after a revised 0.9 percent decline in April that was smaller than previously estimated.” Durable goods demand was up 2.1 percent. According to Bloomberg, “the improvement in orders supports the view of Federal Reserve officials, who last month said the economic slackening likely reflects temporary restraints.”

The AP (7/6, Rugaber) reports that “the jump in factory orders after a sluggish spring suggests supply disruptions stemming from the Japan crisis are fading.” Factory orders reached $445.3 billion overall, which is “almost 32 percent higher than the low point during the recession, reached in March 2009.” The AP notes that “much of the increase was driven by a 36.5 percent increase in orders for aircraft, a volatile category.” However, “there were also signs of strength in areas that had slowed sharply in the previous month,” such as internal company investment.

Reuters (7/6, Mutikani) reports that while durable goods orders were up, inventories for manufactured nondurable goods were somewhat weaker. According to the Wall Street Journal (7/6, Bater, Ackerman, Subscription Publication) the gains were slightly disappointing to economists, who on average had expected a full percentage-point increase in factory orders.

The Hill (7/6, Schroeder) reports in its “On The Money” blog, “The 60 experts surveyed by Bloomberg anticipated new orders would rise on average 1 percent, but there was substantial variance in those projections, ranging from a 0.3 percent decline to a 2.1 percent boost.”

Under the headline “US Factory Orders Lift Recovery Hopes,” the Financial Times (7/5, Kassel, Subscription Publication) reports a more positive take on the news, quoting experts who see strong indications for second-half growth, although they add that the scale of that growth could be modest.

From SME Daily Executive Briefing 7.6.2011

Appropriate for Independence Day, the U.S. manufacturing sector closed the first half of 2011 with a bang.

At least that’s what the data concluded.

In the days leading up to the Fourth of July weekend, we saw positive manufacturing numbers issued by the national Institute of Supply Management and ISM Chicago, as well as by the Federal Reserve banks of Dallas, Kansas City and Richmond.

“I think they all really show that there’s been a little bit of a rebound in manufacturing,” Chad Moutray, chief economist for the National Association of Manufacturers, tells IndustryWeek.

Include the U.S. Census Bureau’s May data on durable-goods orders (released June 24), and Moutray believes “that clearly we have started to turn around.”

The capstone of an upbeat week came Friday, when the national ISM reported that its June purchasing managers index climbed 1.8% to 55.3.

On June 27, the Federal Reserve Bank of Dallas’s latest Texas Manufacturing Outlook Survey indicated that factory activity picked up in June.

The Federal Reserve Bank of Kansas City’s June Manufacturing Survey, issued June 30, showed that manufacturing in Kansas, Oklahoma and other Plains states “rebounded solidly after a brief slowdown” in May.

“Producers remained generally optimistic about future activity,” Chad Wilkerson, vice president and economist for the reserve bank, said in a news release.

Karen Kurek believes that the recent manufacturing numbers show that the slowdown earlier in the year was merely a symptom of the supply chain disruptions caused by the crisis in Japan.

“I think this is really good news,” says Kurek, who is the national manufacturing practice leader for the business consulting firm McGladrey.

A More Fundamental Slowdown Underway

Cliff Waldman, economist for the Manufacturers Alliance/MAPI, is far less sanguine about the recent manufacturing data.

Waldman asserts that ISM’s June purchasing managers index “provides further evidence that U.S. manufacturing growth is slowing amidst a struggling U.S. expansion and clear signs of moderation in the global economy.”

“The overall index rebounded only modestly from a sharp fall in May, indicating that while the supply chain disruptions from the Japanese disaster have impacted manufacturing growth in recent months, a more fundamental slowdown is underway,” Waldman says.

Waldman is particularly disheartened by the backlog of orders index — one of 11 indices in ISM’s monthly manufacturing report — which slipped from 50.5 in May to 49.0 in June.

Waldman asserts that the drop points to “what will likely be moderate factory-sector activity in the months ahead.”

Indeed, there’s plenty of reason for manufacturers to be cautiously optimistic — emphasis on “cautiously.”

The biggest reason is the specter of rising commodity prices.

In McGladrey’s spring survey of manufacturing executives, 90% of respondents said they expected their raw-materials costs to go up, Kurek notes.

With consumer confidence still wobbly, manufacturers are grappling with the difficult decision of whether or not to pass those price increases onto their customers, Kurek says.

Durable-Goods Sector Getting Stronger

Manufacturers, Moutray agrees, will be keeping a close eye on commodity and energy prices, “and inflation in general.”

They’ll also be watching what happens in Washington, D.C. — where the debt crisis has taken center stage — “with a little bit of wonder.”

Still, Moutray is encouraged by what he’s seeing, particularly in the comeback of the auto industry and others in the durable-goods manufacturing sector.

In May, new orders for durable goods increased 1.9% to $195.6 billion, after a 2.7% decline in April, according to the latest data from the U.S. Census Bureau.

“The growth in durable goods really is what has helped lead the recovery so far since December 2009,” Moutray says. “And if that sector can recover, then obviously that’s a good sign for the second half of the year.”

See Also:

“ISM: U.S. Manufacturing Gained Momentum in June”

“U.S. Stocks End Rocky First Half on a High Note”

Chicago-Area Manufacturing Picks Up.

Under the headline “Midwest Business Barometer Jumps In June,” Reuters (7/1, Saphir) reports that the Chicago Business Barometer hit 61.1 in June, increasing from 56.6 in May and surprising analysts who had been predicting a drop in the barometer. The Institute for Supply Management reported that new orders reached 61.2, up from 53.5 the previous month.

Noting the mixed index findings from the most recent Fed Beige Book reports, the Wall Street Journal (7/1, Lahart, Subscription Publication) quotes Barclays economist Dean Maki, who said that while interpretation of the barometer was complicated, Chicago has shown more consistent strength than other regions.

Kansas City Fed Finds Regional Manufacturing Rebound. The Wichita (KS) Eagle (6/30, Voorhis) reports, “The latest survey by the Kansas City Federal Reserve Bank showed that manufacturing rebounded solidly in June after a brief slowdown last month, and producers remained generally optimistic about the future.” Chad Wilkerson, the bank’s vice president, said, “Raw materials price indexes fell for the second straight month, but more producers plan to raise selling prices in the months ahead.” He added, “Hiring plans remain fairly solid for the second half of the year.” The Kansas City Star (7/1, Rosen) reports, “Overall, the Fed said its indexes that measure manufacturing activity were ‘solidly positive’ in June compared with a year ago.”

From SME Daily Executive Briefing 7.1.2011

Outlook For US Manufacturing Sector Remains Positive.

In its lead story last night, ABC World News (6/29, lead story, 2:20, Stephanopoulos) reported, “It is the engine that could rev up our economy, manufacturing, making things right here in America. And today, a name we all grew up with, Mars Candy, announced plans to hire hundreds of workers and build a new quarter billion dollar factory, its first on American soil in decades. It’s part of a bigger picture, too; 173,000 manufacturing jobs created in the past 12 months. Manufacturing was growing much faster than the overall economy. .. And here’s more good news. One study has shown that by 2015, production costs in the US and China, incredibly, will be about the same for many products, which means more companies will be bringing more of these jobs home.”

More Companies Deciding To Reshore Manufacturing Operations. Fortune (6/30, Tseng) reports that “US manufacturing appears to be on the cusp of an awakening – if not a full rebirth,” and explores some of the reasons behind this trend. Among those noted in the article is the increased expense of manufacturing overseas, both in terms of wages and shipping costs, as well as the costliness of dealing with “weak links” in a global supply chain. At the same time, experts say, there are limits the trend’s benefits. For example, while the benefits of manufacturing in China for export purposes have decreased, the Chinese consumer base for many companies has also increased, and if the company is producing goods in China for the Chinese market “then they’re likely going to stay,” experts said. Additionally, with ever-increasing use of automation, “there are sizeable limits over how many more jobs re-shoring would create.”

Companies Explain Motivations Behind Reshoring Decisions. A similar article in CNNMoney (6/30, Prasso) reports on the prevalence of “a trend called reshoring, in which primarily small businesses decide that China is a hassle and that they want to bring their operations closer to home, where the recession has lowered costs, created workers eager for jobs, and made it easier to justify US manufacturing.” Increasingly, businesses both large and small are looking to “take advantage of local incentives and move back at least some of their manufacturing operations for products sold in the US market.” Companies who have made the decision say that, in addition to the other benefits, reshoring simplifies their operations, and decreases the amount of travel and quality control they need to do.

From SME Daily Executive Briefing 6.30.2011

Orders for durable goods probably climbed in May after slumping the prior month, easing concern manufacturing will share in an extended U.S. growth slowdown, economists said before a report today.

Bookings for goods meant to least at least three years increased 1.5 percent after a 3.6 percent drop in April that was the biggest in six months, according to the median of 69 estimates in a Bloomberg News survey. Another report may confirm the world’s largest economy cooled in the first quarter.

Factories will probably rebound as parts shortages stemming from the disaster in Japan wane, fuel costs ebb and a drop in the value of the dollar combined with growing economies overseas push exports up. The improvement last month would support the view of Federal Reserve officials, who this week said the slackening in the expansion may be due to temporary restraints.

“We will begin to see firmer manufacturing output in the months ahead,” said Robert Dye, senior economist at PNC Financial Services Group Inc. in Pittsburgh. “All indications are that Japanese manufacturers are making very good progress in recovering from earthquake damage. Supply chain bottlenecks are easing, so we’ll see firmer durable goods orders.”

The Commerce Department report is due at 8:30 a.m. in Washington. Estimates ranged from declines of 1.9 percent to increases of 5.5 percent.

Less Growth

Revised figures from the agency due at the same will show the world’s largest economy grew at a 1.9 percent annual rate from January through March after expanding at a 3.1 percent pace in the last three months of 2010, according to median forecast in a Bloomberg survey. The government’s third estimate of gross domestic product would be up from the 1.8 percent gain reported last month.

Manufacturing, which has been benefiting from a pickup in exports to countries like China and Brazil, began to cool in the aftermath of Japan’s earthquake in March and as raw-material costs climbed. Factory production dropped 0.5 percent in April, restrained by shortages of auto parts, according to figures from the Fed.

Reports this month indicate a recovery may already be at hand. Output climbed 0.4 percent last month on rising demand for machinery and computers, Fed data showed June 15. Autos and parts production fell 1.5 percent, representing an improvement from the 6.5 percent plunge in April as supply restraints eased.

‘Temporary’ Influences

“The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan,” central bankers said June 22 in announcing they will maintain record monetary stimulus.

“The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said at a press conference after the Federal Open Market Committee met.

Manufacturing shares have reflected the slowdown. The Standard & Poor’s Supercomposite Machinery Index, made up of 54 companies including Caterpillar Inc., Deere & Co. and Cummins Inc., dropped 6 percent in May, compared with a 1.4 percent decrease for the broader S&P 500 Index.

FedEx Corp. (FDX), operator of the world’s biggest cargo airline, is among companies projecting business will improve. The Memphis, Tennessee-based carrier this week forecast full-year earnings that may top analysts’ estimates as demand climbs.

“We believe the near-term softness in the economy will be temporary as fuel prices have retreated from their April highs and the Japanese economy recovers,” Frederick Smith, chairman and chief executive officer of FedEx, said on a June 22 conference call. “We believe the industrial sector will lead growth in the United States and overseas in the next two years, supporting shipping demand.”

By Alex Kowalski – Jun 23, 2011 9:01 PM PT

Click HERE for full article

Economists Believe Recovery Still Has Potential To Accelerate.

USA Today (6/21, Patterson) reports that according to economists, “the US economy is at a pivot point, teetering between another downturn and a return to the growth path it was on until earlier this year. … One corner of the economy that could tip the scales toward renewed growth: a bounce in auto sales and manufacturing in the second half of the year.” But economists say “growth isn’t likely to surge,” though “it could tick up enough to reverse the slowdown seen in the second quarter, fueled in part by a rebound in the auto sector, which took a hit after a devastating tsunami struck Japan and crimped supply lines and sales.”

Last Decade Saw Economic Growth In Texas, Decline In Michigan. USA Today (6/21, Cauchon) reports, “Texas became the USA’s second-largest economy during the past decade — displacing New York and perhaps heading one day toward challenging California — in one of the biggest economic shifts in the past half-century.” Meanwhile, “North Carolina, Virginia and Georgia all” overtook “one-time industrial powerhouse Michigan in economic size from 2000 to 2010.”

Manufacturing Comeback Boosting Rust Belt In 2011.

McClatchy (6/21, Pugh) reports, “The economic recovery may have stalled in parts of the South and West hit hard by the housing bubble, but Rust Belt states, buoyed by a manufacturing comeback, have seen a steady decline in their jobless rates over the last year.” McClatchy adds that “of the 10 states where unemployment rates dipped the most from May 2010 to May 2011, Rust Belt states — Michigan, Indiana, Ohio, Pennsylvania and Illinois — account for half, according to Labor Department figures.”

Michigan’s Business Climate Improves, But Lags Other States. The AP (6/21) reports, “Michigan’s business climate is improving but still lags more competitive states, according to a report released Monday by Business Leaders for Michigan during a Lansing conference attended by about 300 business leaders.” The report found that Michigan “is starting to recover from its decade-long economic slump as its unemployment rate creeps down and per-capita income growth inches up.” At the same time, however, the state “isn’t doing a very good job selling its strong points to corporate leaders considering places to locate,” the report found.

Michigan-Area’s Manufacturers “Come Roaring Back.” The AP (6/21) reports that those Muskegon, Michigan-area manufacturers that survived the recession “have come roaring back” since the downturn ended and “have a great deal to celebrate during manufacturing month this May.” The AP profiles several of the companies, and notes that many of them are also optimistic about their futures. Mark Fazakerley, co-owner of Eagle Alloy said, “I think this recovery is going to continue.” He added, “The strongest and most immediate job growth in Muskegon County will be in manufacturing. The remaining manufacturers in Muskegon are pretty stable and are well run operations.”

Stocks Finish Higher.

The AP (6/21, Choe, Randall) reports, “Investors largely put aside their concerns about the Greek financial crisis Monday and focused instead on value. Stocks rose broadly after the market shook off its longest weekly losing streak in nearly a decade.” The S&P “rose 6.86 points, 0.5 percent, to close at 1,278.36. The Dow Jones industrial average added 76.02 points, or 0.6 percent, to 12,080.38. The Nasdaq composite gained 13.18, or 0.5 percent, to 2,629.66.” The Wall Street Journal (6/21, Conway, Subscription Publication), among other news outlets, also reports the story this morning.

Virginia Exports Increased 8 Percent In 2010.

The AP (6/21) reports, “Virginia exports increased 8 percent in 2010 to $29 billion, ranking it as the 22nd-largest exporting state in the US, according to recent data from the Virginia Economic Development Partnership’s international trade office.” These higher exports are “having a large impact on the state’s economy.” Paul H. Grossman Jr., director of international trade and investment for the office, said the weak dollar had played a large part in the state’s success with exports. Grossman also noted “that Virginia has received funding for programs to help companies expand exports to emerging nations that have a surging middle class by putting them face-to-face with foreign buyers.”

From SME Daily Executive Briefing 6/21/2011

April U.S. manufacturing technology consumption totaled $396.92 million according to AMT – The Association For Manufacturing Technology and AMTDA, the American Machine Tool Distributors’ Association. This total, as reported by companies participating in the USMTC program, was down 21.0% from March but up 74.9% when compared with the total of $226.99 million reported for April 2010. With a year-to-date total of $1,595.98 million, 2011 is up 105.3% compared with 2010.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

“It is very encouraging to see year-to-date orders more than double last year’s pace particularly with the price of oil, unrest in the Middle East, and the disasters in Japan,” said Douglas K. Woods, President of AMT. “Despite April’s numbers being slightly lower than March, recent levels of outstanding order activity are now approaching pre-recession levels which is a positive long-term indicator for our industry.”

The United States Manufacturing Technology Consumption (USMTC) report, jointly compiled by the two trade associations representing the production and distribution of manufacturing technology, provides regional and national U.S. consumption data of domestic and imported machine tools and related equipment. Analysis of machine tool consumption provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.

U.S. manufacturing technology consumption is also reported on a regional basis for five geographic breakdowns of the United States.

Northeast Region

At $58.26 million, April manufacturing technology consumption in the Northeast Region was down 24.8% when compared with the $77.43 million total for March but up 61.9% when compared with April a year ago. The year-to-date total of $240.64 million is 93.3% more than the comparable figure for 2010.

Southern Region

April manufacturing technology consumption in the Southern Region totaled $51.30 million, 12.8% more than March’s $45.47 million and 61.2% more than the April 2010 total. With a year-to-date total of $184.93 million, 2011 is up 49.7% when compared with 2010 at the same time.

Midwest Region

Midwest Region manufacturing technology consumption in April stood at $124.34 million, 39.5% less than the March total of $205.64 million but up 117.4% when compared with last April. At $554.39 million, the 2011 year-to-date total is 156.7% more than the comparable figure for 2010.

Central Region

Manufacturing technology consumption in the Central Region in April totaled $120.77 million, down 5.0% from March’s $127.14 million but up 64.0% when compared with the April 2010 figure. The $456.34 million year-to-date total is 112.6% higher than the total for the same period in 2010.

Western Region

Western Region manufacturing technology consumption totaled $42.25 million in April, 10.1% less than the $47.01 million total for March but 49.1% higher than the tally for April 2010. At $159.68 million, 2011 year-to-date is up 61.5% when compared with last year at the same time.

Click HERE for full article.

Bloomberg News (6/9, Zumbrun) reports, “The Federal Reserve said the economy expanded at a ‘steady pace’ in most of the US while slowing in four of 12 regions as consumers contended with higher food and fuel prices and shortages of parts reduced auto production.” The Fed’s Beige Book reports “indicated that economic activity generally continued to expand since the last report, though a few districts indicated some deceleration,” the agency said, noting that manufacturing “continued to expand in most parts of the country,” while other factors like consumer spending and employment were either “mixed” or showing slow improvement. John Canally, of LPL Financial Corp said the results show the economy is “by no means booming, but it does sound like the temporary factors are a big part of what we saw in the data the last six weeks.”

The AP (6/9) reports that the Beige Book reports were “the weakest survey since fall, when two regions failed to grow at all. And it confirmed a slew of recent data that portray a national economy whose growth has faltered.” However, the AP notes, “many economists agree with comments Fed Chairman Ben Bernanke made Tuesday,” when “he suggested that the slowdown from high gas prices and Japan’s crises is temporary and that growth should pick up later this year.” The AP (6/9, Rugaber) also provides highlights of the reports from the 12 regional bank districts.

Under the headline “Fed Report Finds Cause For Optimism,” the Wall Street Journal (6/9, Lahart, Subscription Publication) reports that some analysts had expected deeper economic weakness to be highlighted in the Fed’s report. And while “a few Districts indicated some deceleration,” as the report says, experts say that the temporary nature of many of the hurdles, such as supply chain disruptions from the disasters in Japan that are now normalizing again, is reason to expect continued improvement through the rest of 2011. Like the AP, the Wall Street Journal (6/9, Bater) highlights details from the 12 regional bank districts.

From SME Daily Executive Briefing 6/9/2011

The gloom and doom brigade has been out in force for the last few weeks. Some of this reaction is justifiable when one looks at the numbers that have been released lately. The housing market is still skidding to lower levels. The consumer has retreated in the face of more inflation threats. The jobless rate worsened as the private sector slowed its hiring. Suddenly, there are conversations about double dips and Great Depressions and the very end of the world as we know it. The manufacturing sector in particular seemed to lose its position as the engine of the recovery. The PMI and CMI numbers both slumped, and there was no good news in the durable goods category either. All in all, it was a pretty miserable week, and the markets reflected the new sense of impending doom.

There are three reasons to think that all this is temporary and not the start of another breakdown in the core economy. The first and perhaps the most important factor is the unexpected surge in inflation that took place at the start of the year. This is not yet an increase in the all-important core rate that motivates the Fed to make decisions, but when the real rate of inflation spikes there is an almost instant consumer reaction, when the inflation comes from hikes in commodity prices. The emergence of the “Arab Spring” took the world by surprise; within days the price per barrel of oil had thrust ahead by almost $20, and the price of gas jumped by 70 cents. The consumer was fresh off the memory of 2008 and assumed that it was only going to get worse, and the talking heads reinforced that perception. The result was a rapid withdrawal of consumer confidence which took a big chunk out of overall demand.

However, as outlined in the commodity story below, the price of oil may be heading down soon, and gas prices have already eased a little. They are still higher than they were a few months ago, but the $4 barrier was broken for only a short time and in select regions of the country.

More important, the inflation threat is not yet manifesting in a way that will shift consumer behavior permanently. The three factors that beget inflation are hikes in commodity prices, shifts in the wage structure, and an overall abundance of money in the system. At the moment only commodity prices have become a factor. The high unemployment rate has kept wages low, which is good as far as inflation is concerned. The supply of money has been substantial, but for the most part it has not leaked into the system; as long as it is not leaving the banks it is not fueling price hikes. In other words, the inflation pressure felt by the consumer is coming from fuel and food, and there may be some modest relief on the way for both of these sectors. If the consumer thinks that the threat of much higher pricing is not so immediate, they will likely relax and get back to their old patterns.

The second reason that the downturn might be short-lived is that much of the decline of the last few weeks has been related to the issues stemming from the Japanese earthquake. This was a cruel reminder of just how interdependent the world has become and how fragile the supply chain really is. The devastation in Japan set the industrial sector back by months. The flow of parts and supplies for the world was interrupted and many manufacturers felt the pinch. The Japanese are already starting to recover, and most of those parts will be flowing soon, but the damage will linger for a while longer as the whole notion of just-in-time has been challenged. The response to the disaster will take some time to digest and accommodate, but this process is already under way, and by the end of the year there will be a return to some semblance of normal.

The third reason that this slowdown is likely to be temporary is that some of the conditions that led to the expansion of the recession are fading, and these improvements will start to show up in the months ahead. The one factor that has observers a little baffled is that banks and corporations have more money on hand than they have had in years, but that cash is not going anywhere. The banks have been sitting on it partly because they have had to contend with the wave of rule changes that stemmed from the Dodd Frank legislation, and partly because they have returned to their old-school ways. Slowly but surely, the new system is getting in place, and banks are interested again in expanding their business through loans. Credit is still far from loose, but it isn’t as tight as it has been. The business community has been holding on to cash more aggressively as well, partly because they are not sure what they can count on from the banks anymore and partly because they are just more cautious than they have been. The need to spend that money is not pressing as yet, but if the competition starts to move or there appears to be more demand, they will start to let loose that cash, and the economy will be stimulated again.

Of course there is no way of knowing just when this money will start to flow. It is a bit like the Catch-22 dilemma. Business will spend when there is demand to justify it, but the consumer will not boost demand until business starts expanding — and hiring. The wait will not be permanent, but it is also unlikely that a shift is imminent.

What does this mean for manufacturing?

The industrial sector has been pulling the economy along on the strength of expanded exports and the need to rebuild inventory. Is this something that can be counted on to start up again in the coming months? It is likely that the export demand will return and in fact it has not declined all that much in the past few months. The big drop has been in inventory build, and until the consumer gets more aggressive there will not be a drawdown sufficient to provide much impetus for the manufacturer. As in most other recoveries, the consumer will hold the key.

Summary by Dr. Chris Kuehl, FMA’s economic analyst and founder of Armada Corporate Intelligence.

Following yesterday’s reports on the MAPI/Manufacturing Alliance Global Report-May 201, IndustryWeek (6/7, Andorka) reports “the outlook for the US and global economies is volatile, with one analyst suggesting another economic downturn is possible.” The report’s author Cliff Waldman said the US was “at the fulcrum of the global economic future,” and the “the U.S economy will continue to limp along for the next few years with slow unemployment improvement and uneven growth.” However, Waldman is concerned “that the policymakers in the country have few levers left to pull to pull it out of its current economic quagmire.” While he said that another downturn was possible, Waldman added that the future for manufacturing looks relatively bright, with emerging economies providing an opportunity for growth.

Industrial Distribution (6/8) reports on an interview with Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee, about the most recent Manufacturing ISM Report on Business. Regarding the current weakness that has been reflected in recent economic reports, Holcomb said that while growth has slowed in recent months, “all of these important primary metrics were in the 60s, which is really strong.” Going forward, Holcomb said, “I guess our overall sentiment here is continuing growth and cautious optimism, going forward over the next few months.” While the most recent data was less than stellar, he advised, “Let’s wait until next month before we read too much into this.”

From SME Daily Executive Briefing 6/8/2011