Leading Indicators of the Electrical Economy

Oct. 17, 2014
Purchasing managers index, manufacturing technology and small business indicators suggest continued sluggish growth and uncertainty.

Purchasing Managers Index slides 2.4 points in September. Bradley Holcomb, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee, Tempe, Ariz., said the September PMI registered 56.6%, a decrease of 2.4 percentage points from August’s reading of 59%, indicating continued expansion in manufacturing. The New Orders Index registered 60%, a decrease of 6.7 percentage points from the 66.7% reading in August, indicating growth in new orders for the 16th consecutive month.

August manufacturing technology orders up slightly. August U.S. manufacturing technology orders totaled $356.69 million according to the Association for Manufacturing Technology Orders (USMTO) report. This total was up 0.4% from July but down 6% when compared with the total of $379.26 million reported for August 2013. With a year-to-date total of $3,076.98 million, 2014 is down 2.4% compared with 2013.

“U.S. manufacturing activity remains at a brisk pace, and especially encouraging for manufacturing technology orders was a recent uptick in durable goods orders, particularly in aerospace, automotive, and several other key industries,” said Douglas Woods, president, Association For Manufacturing Technology. “There has also been good news in factory employment as more manufacturers add workers to their payrolls.”

NFIB says small business less optimistic in September. The Small Business Optimism Index published monthly by the National Federation of Independent Business (NFIB) gave up 0.8 points, falling to 95.3. At 95.3, the Index is now five points below the pre-recession average (from 1973 to 2007). “Small businesses just can’t seem to get out of second gear,” said NFIB chief economist Bill Dunkelberg.  “In order for the Index to get back to the average, responses to the 10 Index component questions would have to improve 50 percentage points cumulatively.  That’s a lot of ‘positive’ responses to makeup to get back to ‘average’ much less reach a level that means a solid recovery. “A decline in job openings and capital spending plans were primarily responsible for September’s Index decline. Overall, small business owners are still stuck in a rut that has been difficult to escape.”