Empire Manufacturing Data Screams Higher

The Empire Manufacturing Index screamed higher to 12.1, much higher than the estimate of 3, yet the simple reason for this was margin pressure increased. As the chart below demonstrates The Prices Paid - Prices Received delta increased yet again, this time hitting 26.60, indicating manufacturers are losing on margin, which will impact the bottom line. And the future does not look much better: Prices Paid is expected to increase to +31.91 and Received to pick up to +5.32, meaning the margin pressure is here to stay.

Comments

[Dave Wrixon:]

Hmmm. Sounds painful.

Aug 17 12:24 PM

[traden4alpha:]

Lose a little bit on every sale but make it up in volume?

Given all the excess capacity (both in labor and equipment), is this really surprising. Companies are hoping for a return of revenues and are producing to keep people and equipment busy.

Aug 17 01:02 PM

[doubleguns:]

Inflation that is not being passed on to the consumer who cant afford it anyway. Sell cheap or sell nothing. Consumers are looking for bargins and if this keeps up it will be a habit that cant be broken.

Aug 17 02:09 PM

[TeresaE:]

We have noticed an "uptick" in quoting. Not sales (yet) but quoting.

A handful of manufacturers are fixing machines (probably long overdue maintenance) in anticipation of the "inventory restocking" so banded about lately.

Or, one lonely purchasing agent is shopping out the same 2000 pcs of a quarter item to 20 distributors.

Or, some obscure, non-standard item that NO ONE has in stock and China (for now) refuses to make 5000 pieces of.

Those three things do not a turnaround make.

Aug 18 09:54 AM