Revised October 17, 2016
60 ISM Manufacturing Purchasing Managers Index (September 2015 September 2016) 58 56 54 52 50 48 46 44 42 Sept-15 Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sept Purchasing Managers' Index New Orders Production Employment Inventories Source: Institute for Supply Management
1.0% Percentage Changes in Manufacturing Output (September 2015 September 2016) 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% Sep-15 Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sep -0.4% -0.6% -0.8% Manufacturing Durable Goods Nondurable Goods Source: Federal Reserve Board
3% Year-Over-Year Industrial Production Growth (September 2015 September 2016) 2% 1% 0% Sep-15 Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sep -1% -2% -3% Industrial Production Manufacturing Durable Goods Nondurable Goods Source: Federal Reserve Board
Year-Over-Year Growth in Manufacturing Production by Sector (September 2015 to September 2016) -8.1% Apparel and leather Miscellaneous durable goods 5.2% -3.3% Machinery Motor vehicles and parts 5.0% -2.7% -2.5% -2.5% -2.4% -2.2% Printing and support Primary metals Paper Furniture and related products Aerospace and miscellaneous transportation equipment Textile and product mills Computer and electronic products Nonmetallic mineral products Chemicals Electrical equipment and appliances Petroleum and coal products 2.3% 1.9% 1.2% 0.8% 0.8% 0.4% -1.7% Fabricated metal products Wood products 0.4% -1.1% Plastics and rubber products Food, beverage and tobacco products 0.3% Source: Federal Reserve Board ACTUAL YEAR-OVER-YEAR GROWTH Manufacturing (NAICS): 0.1% Durable Goods: 0.3% Nondurable Goods: 0.1%
NAM Manufacturers Outlook Survey by Quarter (First Quarter 2015 Third Quarter 2016) 88.5% 76.3% 67.3% 59.6% 56.6% 61.7% 61.0% 2015:1 2015:2 2015:3 2015:4 2016:1 2016:2 2016:3 Source: NAM Manufacturers Outlook Survey Note: Percentage of respondents who characterized the current business outlook as somewhat or very positive.
5% Expected Growth of Manufacturing Activity (First Quarter 2015 Third Quarter 2016) 4% 3% 2% 1% 0% Q1:2015 Q2:2015 Q3:2015 Q4:2015 Q1:2016 Q2:2016 Q3:2016-1% Sales Exports Capital Investments Full-Time Employment Source: NAM Manufacturers Outlook Survey Note: Expected growth rates are annual averages. Avg. 12-Month Growth Rates Sales: 1.9% Exports: 0.4% Capital Investments: 0.8% Full-Time Employment: 0.4%
Major Contributing Factors for Those Manufacturers Not Increasing Capital Spending Reduced or slower demand for our products 46.6% Already operating below capacity Limited need to replace existing capital goods Political uncertainty Global uncertainty 40.6% 38.2% 35.3% 32.9% Finances not allowing us to invest more at this time 26.1% Other 10.8% Unsure 4.4% Source: NAM Manufacturers Outlook Survey Note: Respondents were able to check all that apply. Therefore, responses exceed 100 percent.
Primary Current Business Challenges (Third Quarter 2016) Rising health care/insurance costs 74.8% Unfavorable business climate (e.g., taxes, regulations) 73.6% Weaker domestic economy and sales for our products 65.0% Attracting and retaining a quality workforce 52.5% Weaker global growth and slower export sales 43.0% Strengthened U.S. dollar relative to other currencies 39.2% Rising raw material costs for our products 21.4% Challenges with access to capital 6.8% Source: NAM Manufacturers Outlook Survey Note: Respondents were able to check all that apply. Therefore, responses exceed 100 percent.
50.3 51.9 Markit Purchasing Managers Indices for the Top 15 Export Markets for U.S. Manufactured Goods 50.1 50.4 55.4 54.3 (September 2016) 47.6 53.4 49.3 46.0 49.7 52.9 49.8 52.2 N/A Emerging Markets Manufacturing PMI: 50.1 Eurozone Manufacturing PMI: 52.6 Global Manufacturing PMI: 51.0 U.S. Manufacturing PMI (Markit): 51.5 Source: Markit
96 Trade-Weighted U.S. Dollar Index Against Major Currencies, 2014 2016 (Currency Units per U.S. Dollar, 1973=100) 94 92 90 88 86 84 82 80 78 76 74 2014 2015 2016 Source: Federal Reserve Board
British Pound to One U.S. Dollar 0.85 0.80 0.75 0.70 0.65 0.60 0.55 2014 2015 2016
Monthly Changes in Employment (September 2015 September 2016, in Thousands of Employees) 295 280 271 233 271 252 149 168 186 144 167 156-9 2 3 6 18-16 -29 5 24-17 8 2-16 -13 Sep-15 Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Aug Sep Nonfarm Payrolls Manufacturing Source: Bureau of Labor Statistics
Millions of Workers 12.4 Employment Situation, 2015 2016 Unemployment Rate 5.9% 12.3 5.7% 5.5% 12.2 5.3% 5.1% 12.1 4.9% 4.7% 12.0 4.5% Manufacturing Employment Unemployment Rate Source: Bureau of Labor Statistics
Manufacturing Sectors with the Largest Net Employment Gains (September 2015 to September 2016, in thousands of employees) Food manufacturing 34.3 Miscellaneous nondurable goods manufacturing 14.2 Chemicals 10.6 Miscellaneous durable goods manufacturing 5.5 Plastics and rubber products 4.6 Nonmetallic mineral products 3.0 Furniture and related products 1.4 Source: Bureau of Labor Statistics
425 Manufacturing Job Openings, Hires and Separations (July 2015 July 2016, in thousands of workers) 400 375 350 325 300 275 250 225 Jul-15 Aug Sep Oct Nov Dec Jan-16 Feb Mar Apr May Jun Jul Job Openings Hires Separations Source: Bureau of Labor Statistics
Real Gross Domestic Product (Chained 2009 Dollars) 3% 3% 2.6% 2.5% 2.5% 2% 2.0% 2.0% 2.0% 2.0% 2.0% 2% 1.4% 1.5% 1% 1% 0.9% 0.8% Real GDP Forecast: 2.6% (2015) 1.6% (2016) 2.0% (2017) 0% 2015:I II III IV 2016:I II III IV 2017:I II III IV Source: Bureau of Economic Analysis, NAM calculations using Moody s Analytics simulation model
110 Predicted Manufacturing Production Based on the NAM Manufacturers Outlook Survey 105 100 95 90 85 80 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Manufacturing Production Prediction for Manufacturing Production Q1:2017 1.5% Year-Over-Year Growth Rate Manufacturing Production (Predicted) Source: NAM Manufacturers Outlook Survey