Dallas Fed June manufacturing survey -23.2 vs -29.1 prior

<ul><li><a href="https://www.forexlive.com/news/dallas-fed-manufacturing-index-291-vs-234-prior-20230530/" target="_blank" rel="follow">Prior </a>was -29.1</li><li>Output -4.2 vs -1.3 prior</li><li>New orders -16.6 vs -16.1 prior</li><li>Prices paid for raw materials +1.4 vs +13.8 prior</li><li>Prices paid for finished goods -1.9 vs +0.4 prior</li><li>Capex +0.3 vs -3.7 prior</li><li>Employment +2.2 vs +9.6 prior</li><li>Company outlook -10.7 vs -22.3 prior</li></ul><p>Comments in the report:</p><p>Chemical manufacturing</p><ul><li>We expect slower activity in the coming months as customer
destocking continues as their business slows. We expect to hold onto as
many trained employees as we can, expecting a return to growth in 2024.</li><li><a href="https://www.forexlive.com/terms/i/inflation/">Inflation</a> continues to take a toll on employee salaries and
benefits. Costs of materials, parts, external labor, and shipping
continue to increase as suppliers mitigate the loss of volumes in price
to sustain or increase profit levels. Customers continue to give mixed
messages around supply and demand as consumer spending is not
consistent. Customers are just now working off surplus inventories from
2022; as anticipated, purchases occurred due to supply/demand woes, war
impact and high inflation costs.</li></ul><p>Computer and electronic product manufacturing</p><ul><li>We continue to struggle to find qualified staff. We intend to
hire more people and embark on a significant capital improvement
project (including new building, new manufacturing equipment) so that we
have capacity available as soon as the economy starts to recover after
the recession that everyone is predicting.</li><li>We are still seeing some long lead times, currently with the aluminum industry.</li><li>We are starting to see a major shift in industrial production and a lack of confidence.</li></ul><p>Fabricated metal product manufacturing</p><ul><li>Supply constraints improved versus the prior year, but there are still some ongoing challenges.</li></ul><p>Food manufacturing</p><ul><li>We are definitely slower from a production perspective. We expect
production to pick up a little later in the summer in preparation of
fourth-quarter sales.</li><li><a href="https://www.forexlive.com/terms/s/stagflation/">Stagflation</a>. Political incompetence is creating an unstable business environment.</li></ul><p>Machinery manufacturing</p><ul><li>We’re investing now with new equipment that should increase our
competitiveness even in a potentially shrinking market six months from
now. The last 12 months have provided the wherewithal to be able to
make such investment. We’ll see how it shakes out.</li><li>We are living hand to mouth. The surge in orders could easily stop as quickly as it started. We’re month to month.</li><li>Business has slowed down significantly over the last few months and is now holding steady at a relatively low level.</li></ul><p>Nonmetallic mineral product manufacturing</p><ul><li>The interest rate is too high and is eating away our profits.</li></ul><p>Paper manufacturing</p><ul><li>Orders are cooling off a little from and already-reduced level.
Our industry cooled off a few quarters ago, and now we are feeling the
same thing.</li></ul><p>Plastics and rubber products manufacturing</p><ul><li>We service retailers. They are tentative; we are wary.</li></ul><p>Primary metal manufacturing</p><ul><li>Section 142 tariffs raise our costs, rendering us uncompetitive with foreign competitors who don’t pay that cost.</li><li>Incoming orders are off substantially, especially in the
residential building and construction markets we produce raw material
for. Also, the percentage of imports of aluminum extrusions is at its
highest level in several years, going back to when China was subsidizing
their aluminum extrusion industry for shipments to the U.S. We are
also being affected severely by Mexico shipping extrusions to the U.S.
without having to pay Section 232 tariffs. Our industry is at a
critical state at this point.</li></ul><p>Printing and related support activities</p><ul><li>We have started to get very busy with a large job that we knew
was coming and has now arrived. Because of this and a couple of other
nice large jobs we have landed, we will be busy during the summer and
into the fall. It’s a good thing because our regular business from
regular customers is in the ditch right now. I'm hearing from many
others in our industry that it’s slow times for them, so we are very
fortunate to have the work we have.</li></ul><p>Textile product mills</p><ul><li>June has been much stronger than anticipated across all channels.
We think our consumer (which tends to be high end and high income) is
feeling more confident about inflation and the future economic outlook
and is back to spending.</li></ul>

This article was written by Adam Button at www.forexlive.com.