Jump to content
House Price Crash Forum
Sign in to follow this  
cashinmattress

Gloomy Manufacturers

Recommended Posts

Gloomy manufacturers

It is incredible that 19 months into such a nasty recession plenty of economic indicators are still getting genuinely worse. Take Wednesday’s survey of US manufacturing conditions from the Institute of Supply Management. Most will rejoice that the factory index rose slightly to 45 per cent in June, in spite of such levels remaining consistent with a shrinking economy. But a peek beneath the headlines reveals that manufacturers are far from cosy.

Three numbers stand out. First, inventories fell yet again, this time by 2 percentage points to 31 per cent – a 27-year low. For months optimists have promised a recovery kicked off by a rebuilding of inventories. Clearly, however, a near-term pick-up in customer appetites is yet to be tapped into manufacturers’ spreadsheets. Those at the sharp end, in other words, are still cutting back.

Second, if things are supposedly improving, why are orders still falling? This component of the survey also fell last month and, like inventories, remains below the magical 50 per cent level. That leaves the surprise growth of orders in May – which broke a 17-month downward trend – looking more like a blip than a turning point. And a drop in orders will feed through to the production index, which itself has only popped above 50 per cent for the first time in nine months.

Finally, the ISM report breaks down its numbers by industry. These show a particularly telling story this month. Amid a mini-bubble in commodity prices, guess which sectors are feeling particularly buoyant these days? Manufacturers of oil, mineral, wood, paper and plastic products, for example, are mostly reporting growth. Companies that make things consumers want, on the other hand, such as furniture, textiles, cars and electronics, are still uniformly gloomy. That is worrying.

Share this post


Link to post
Share on other sites

Media still deluded:

Stocks rise on recovery hopes:

http://money.cnn.com/2009/07/01/markets/ma...sion=2009070116

He said that, in particular, the manufacturing report was driving stock gains Wednesday as it showed that the sector is continuing to dig its way out. He said he was also encouraged by the portion of the report that showed customer inventories are too low, which could suggest a pickup in production is on the way.

Endless ways to spin statistics....

But what seems to hv hardly caught the eye was today's ADP number: a slash of 495k. Tomorrow we hv non-farm payrolls in the US that ADP is supposed to closely follow. -495k was well bellow the median analyst estimate and actually almost as low as the most pessimistic estimate (-500k). Instead, media and spinners enjoy that some numbers are not as bad as they were before; though still indicating serious economic contraction. There is only HOPE left, and that's what a very shallow market is supported by.

Share this post


Link to post
Share on other sites
But what seems to hv hardly caught the eye was today's ADP number: a slash of 495k. Tomorrow we hv non-farm payrolls in the US that ADP is supposed to closely follow. -495k was well bellow the median analyst estimate and actually almost as low as the most pessimistic estimate (-500k). Instead, media and spinners enjoy that some numbers are not as bad as they were before; though still indicating serious economic contraction. There is only HOPE left, and that's what a very shallow market is supported by.

Well, hope plus massive meddling by the Federal Reserve, fiddling of stats (they always seem to get revised down a couple of months later) and of course Goldman Sachs market rigging.

Share this post


Link to post
Share on other sites
Guest KingCharles1st

How long before these idiots in power finally get the message-

ITS OVER!!!

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   287 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.