The November Empire State Manufacturing Survey indicates that conditions for New York manufacturers declined at a modest pace.
The general business conditions index was negative for a fourth consecutive month, but was little changed at -5.2.
The new orders index rose above zero for the first time since June, although it was only slightly positive at 3.1.
The shipments index shot up twenty-one points to 14.6, its highest level since May.
The prices paid index fell three points to 14.6, indicating a modest increase in input prices, and the prices received index held steady at 5.6.
Labor market conditions were noticeably weaker. The index for number of employees fell fourteen points to -14.6, a sharp drop to its lowest level since 2009, and the average workweek index drifted down to -7.9.
Indexes for the six-month outlook were mixed, with the future general business conditions index declining seven points to 12.9, while the future new orders and shipments indexes rose.
These sort of job fairs featured in the video where manufacturers are seeking labor is a common thing nowadays across the industrial belt with recruiters crying that they are unable to find workers.
This particular lady from the Engineering Society is almost frantically pleading with people to apply, no engineering degree required… and there are several thousand positions to be filled.
It would, of course, be very interesting to see how much of this manufacturing “bubble” is being induced by the lower dollar and how much by other factors, but, from the position of trading, these events suggest that the lagging transports just might need little more time in order to catch up with the Dow and please the Dow Theorists who have been pleading this weekend that the lagging transports are signaling the end of the bull.
Wouldn’t all these yettobe hired engineers and laborers have to first make the stuff before it gets shipped?
Wouldn’t some of the transports themselves undergo a substantial change as these manufacturers have come up with nat-gas engines that can cut the gasoline bills?
Three weeks ago, a Detroit TV station reported that manufacturers are facing job shortages and today CNN Money says that the shortage in the manufacturing is so severe that factories are going abroad to import workers.
“U.S. manufacturers, frustrated by a shortage of skilled American factory workers, are going abroad to find them. Business for factories has surged recently, creating a huge demand for machinists, tool and die makers, computer-controlled machine programmers and operators,” writes CNN.
One presumes that this situation is pervasive across the industrial belt from Wisconsin, Indiana, Michigan and Ohio.
Labor import follows H-1B visa program which is approved by the State Department and can be cumbersome and manufacturers acknowledge this.
“H-1B is never going to be the answer to the skills shortage in production jobs in manufacturing,” says Gardner Carrick, senior director with the Manufacturing Institute.
Labor Department is trying to discourage manufacturers from using H-1B visas and have issued a token grant of $2.2 million.
New Orders +0.6 Production +0.5 Employment +1.7 Deliveries +0.6 Inventories +5.4
Are inventories attempting to catch up to demand? Will inventory buildup continue at this robust clip (compared to others) into July and if so where to expect that growth to come from?
Autos have had some car supply issues with reports surfacing of a car shortage. “IHS Automotive estimates that the U.S. has around 400,000 fewer cars in inventory than it should have,” one report notes.
If so, any July inventory buildup should spill over into increased deliveries to the dealerships.
Manufacturing employment may also register a modest increase from these levels as idled auto plants get restarted and workers get a call back.
Will all this translate into increased manufacturing demand?
The guidance offered in the upcoming earnings reports may show clues on this demand.