U.S. Manufacturing Was Strong Last Month, Survey Says

[shugah]

U.S. Manufacturing Was Strong Last Month, Survey Says

Jan. 3 (Bloomberg) -- U.S. manufacturing remained robust at the end of 2005, suggesting production will keep expanding in the new year to fill orders and rebuild inventories, a private group's index may show today.

The Institute for Supply Management's factory index may have fallen to 57.4 from 58.1 in November, according to the median of 49 economists' forecasts in a Bloomberg News survey. Readings above 50 indicate expansion, and the expected level in December is higher than the average for 2005.

Inventory restocking and rebuilding after Hurricane Katrina are supporting factory expansion at a faster pace than earlier in the year. Resilient consumer demand and business investment in equipment will help support growth in 2006, economists said.

``Factory activity likely cooled slightly in December, but remains robust,'' said Michael Gregory, a senior economist at BMO Nesbitt Burns in Toronto.

The institute's index has averaged 55.7 this year and 52.6 the past decade.

http://www.bloomberg.com/apps/news?pid=10000103&sid=atj_uhtULn9E&refer=us

[Atman]

1. BFD

I can manufacture a bazillion widgets, but is anyone going to buy them? The article even states that activity "cooled" slightly already. Perhaps the racist angle to Bush's Katrina response really isn't the whole story. His economic people knew that the disasters would spark this type of "replenishment," which would be, in reality, about the only good economic news going on in the world of real people (read: those not in the 1% base). Far-fetched, maybe, but I've grown so cynical, I've come to believe he'd whore out Barbara if it could raise enough cash to make his numbers go up.

[Clutch Cargo]

3. Derived Demand

Most manufactures don't just manufacture a bazillion widgets simply because they have the capability. Their manufacturing capacity is derived from the end-user projected demand.

[Atman]

6. I certainly understand that "Economics 101" concept

But that manufacturing is also based upon ANTICIPATED demand, so you supposedly have product available when the consumer is ready to buy. Just ask automakers who have lots full of unsold cars every August. Or Apple computer, who can't ever seem to have enough inventory after they announce a new product launch. The housing market isn't a "just-in-time" based manufacturing industry, like cars and widgets, though. My only point was, this story is a capsule of NOW. Let's check it out next month when/if they report that inventories are at an all-time high, thus indicating unsold goods and inaccurate forecasts of demand.

[Judi Lynn]

2. Just remember, that as Reagan called ketchup a vegetable,

_Bush calls working in fast food restaurants "manufacturing:"

As first reported by The New York Times, the fast food issue is taken up on page 73 of the lengthy report in a special box headlined "What is manufacturing?"

"The definition of a manufactured product," the box reads, "is not straightforward."

"When a fast-food restaurant sells a hamburger, for example, is it providing a 'service' or is it combining inputs to 'manufacture' a product?" it asks.

Manufacturing is defined by the Census Bureau as work involving employees who are "engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products."

But, the president's report notes, even the Census Bureau has acknowledged that its definition "can be somewhat blurry," with bakeries, candy stores, custom tailors and tire retreading services considered manufacturing.
(snip/...)

http://www.cbsnews.com/stories/2004/02/20/politics/main601336.shtml

[TomInTib]

8. And don't forget a few thousand meth labs.

[Toots]

4. I guess that means a lot of burgers were manufactured

:shrug:

[kineneb]

12. and would you like fries with your economic report? n/t

[Media_Lies_Daily]

5. More blah-blah.

[Kolesar]

7. What's left of it...manufacturing

What did Ohio lose--50,000 manufacturing jobs in the Bush recession. Ford &GM are announcing more cuts for the country. The Lorain Ford plant is kaput. Mittal Steel just announced the Weirton Steel plant is a goner. We are going to have to learn how to put up cabbage & squash just to survive.

[MGKrebs]

9. USAToday has different numbers.

Manufacturing growth slows in Dec.

NEW YORK (AP) — The nation's manufacturing sector grew at a slower pace in December than in the previous month despite a decline in prices that manufacturers had to pay for raw materials such as fuel, a private research group said Tuesday.

The Institute for Supply Management said its manufacturing index was at 54.2 in December, down from November's 58.1.

I can sort of understand the different spins on the titles, but what is with the numbers? Bloomberg says 57.4 and USA Today says 54.2. Are they referring to the same number? Seems so since they both start at 58.1.

http://www.usatoday.com/money/economy/production/2006-01-03-ISM_x.htm

[shugah]

10. i can't find a reason for the discrepency

but i'm extremely skeptical of the numbers anyway.

the usa today article seems to have more specifics, but it looks like november saw a boost due to katrina and that things have slowed/are slowing.

[General Lee]

11. Here's another view!

Manufacturing much weaker than forecast

Key industrial sector index slumps in December, showing growth but coming in well below estimates.

NEW YORK - The pace of manufacturing fell in December, coming in below Wall Street expectations according to a survey of business executives released Tuesday.

The closely watched Institute for Supply Management's index came in at 54.2 for December, down from a 56.6 reading in November.

Economists surveyed by Briefing.com had forecast a 57.5 reading for December. Any reading above 50 indicates growth in the goods-producing sector of the economy.

Manufacturing Weaker than Forecasted