ISM Survey Says Manufacturing In America Is The Greatest In 13 Years

Tyler Durden's picture

Following modest drops in UK and EU PMIs (and a mixed picture in China), Markit's US Manufacturing PMI inched higher in September amid schizophrenic collapse in output growth (14mo lows) and surge in employment (9mo highs). ISM, on the other hand, reported that US Manufacturing has not been this awesome since June 2004.

Prices Paid are soaring helping Make Manufacturing in America Great Again

 

As New Orders jump (but remain well below early 2017 highs...

 

The surge in prices paid and deliveries stand out...

 

Just one thing... we have seen these odd outlier spikes in ISM before... right after mega storms...

And they did not end well.

As a reminder, ISM and Markit have seen very different views of the US Manufacturing 'recovery' in recent months, as 'real' economic data has actually collapsed...

While ISM headline seems awesome, at least half of the respondents mentioned problems associated with the hurricanes...

  • "Hurricanes causing supply chain and pricing issues." (Chemical Products)
  • "Business levels continue [to be] strong; usually by now, a seasonal downturn begins." (Machinery)
  • "Energy sector (oil and gas) continues to be strong. Price of oil appears to be beginning to stabilize." (Computer & Electronic Products)
  • "We’ve had a very good year and we are forecasting continued strong demand for our product in 2018." (Miscellaneous Manufacturing)
  • "Business is strong. However, we are concerned about price increases due to the hurricanes." (Plastics & Rubber Products)
  • "We are closely watching the Houston events as many of our production chemicals are produced in the Gulf region. Some tightening of supply and/or price increases expected." (Paper Products)
  • "Labor shortages continue to haunt operational capacity both at [the] local plant [level] and up and down the supply chain."(Transportation Equipment)
  • "Hurricanes Harvey and Irma will have significant effects on input costs. Disruption in supply chain. Concerns of transportation." (Food, Beverage & Tobacco Products)
  • "Hurricane Harvey, and now Irma, have impacted the business (building materials). Increasing sales but also causing significant price increases on input raw materials.&quot (Nonmetallic Mineral Products)
  • "Lumber prices starting to drop, and log prices starting to increase. Not the best combination.&quot (Wood Products)

Commenting on the much more 'normal' final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“While the headline PMI remained resiliently elevated in September, despite disruption from hurricanes Harvey and Irma, the details of the survey are more worrying. Output growth was unchanged on August’s 14-month low, and translates into stagnation at best in terms of the official manufacturing output data. Firms’ expectations of future output growth also slipped to a four-month low.

 

“There was better news on the hiring front, with job creation perking up to a nine-month high. However, with employment rising faster than output, productivity may be slipping.

 

“Although the hurricanes appear to have made little overall impact on production, supply delays were widely reported and prices for many inputs rose, suggesting some near-term upward pressure on inflation.”

Rather oddly, as Manufacturing output has declined, employment has improved notably...

'transitory?"

Of course we are used to signals being completely contradictory in other nations...

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YUNOSELL's picture

It's coming to America first
The cradle of the best and of the worst
It's here they got the range
And the machinery for change
And it's here they got the spiritual thirst
It's here the family's broken
And it's here the lonely say
That the heart has got to open
In a fundamental way
Democracy is coming to the USA

Five Star's picture

At the same time average production wages are the lowest relative to stocks on record

http://thesoundingline.com/us-equities-are-the-most-expensive-ever-in-te...

east of eden's picture

Yep. The money just keeps rolling in for the 1% and their ‘enablers’

LawsofPhysics's picture

Indeed.

"Full Faith and Credit"

...humanity has been here before. Get long sharecropping and guillotines.

Stuck on Zero's picture

Manufacturers are staffing up to supply riot gear and tear gas to the state.

Endgame Napoleon's picture

They may have labor shortages due to paying too little to cover the cost of rent for the non parents and the non-custodial parents whose rent and groceries are not covered by welfare and child tax credits of up to $6,269. I do not believe they have labor shortages due to a lack of skill, as often claimed. They can train people.

tion's picture

Deficits closed by 2022?! Yeeeee :)

 

There actually are big disparities in allocation amongst different localities and amongst different (shrinking/growing) industries right now, and a people problem, and unfortunately it is not so easy to fix as just training people =/  

east of eden's picture

Ahhh. You know leonard. What a prophet he was.

gatorengineer's picture

Two words --- Bull shit

 

Give Me Some Truth's picture

Is there one "survey" or set of economic data that anyone (with a skeptical bent of mind) can trust? 

Jtrillian's picture

Say it with me...

All government numbers are highly subjective, often revised, and ALWAYS in hindsight.

east of eden's picture

Inflation is not growth. Period.

LawsofPhysics's picture

Better raise those rates Mr. Yellen!

Consuelo's picture

 

 

Interesting 'wide-angle' view of the Manufacturing Output and Manufacturing Employment graphs...

The take-away being:

Central Bank $$$interventions definitely DO have an impact.   The question remains - for how long and what happens when stealth QE comes to an end...?

Raul44's picture

Well, I did bought Head & Shoulders shampoo yesterday...

gatorengineer's picture

Well Wall Street has been buying Viagra, its long since lost the ability to get it up naturally....

Alongfortheride's picture

Well, that escalated quickly!

 

Can anyone say crack up boom?

Quivering Lip's picture

Not to worry. The Goldman tax plan will inspire all major corporations to repatriate all global funds and use their tax cuts to invest in new factories and jobs instead of buying back shares.

Bwahahahhahahhahhahahhahah

Not to worry not going to pass anyways but don't tell the stawk market.

Bwahahahhahahhahhahahhahah

LawsofPhysics's picture

LOl!!! Yes, in a "mark to fantasy" world.

"Full Faith and Credit"

Falling Down's picture

It's weird in manufacturing, right now. Why industrial automotive is strong beats the shit out of me, look at the construction numbers and tell me things "line up".

Place I work at is busy enough, but we're not a bubble-chasing shit show that works their folks to death, like most manufacturers these days.

 

Blue Dog's picture

In my area there are big factories closing several times a year. There's no way manufacturing output is the most since 2004.

Bobbyrib's picture

It didn't take long to make America great again with Trumponomics. /sarcasm.

 

This seems to be a case of fake it until you [do not] make it.

assistedliving's picture

something positive on this board? 

thought i was on ZH for my dose of doomporn.

 

tion's picture

I think plenty of us could use more bloomporn :)

Davidduke2000's picture

Whenever numbers come out from the government or wall street I remeber harry mudd from Star Trek who never say a word of truth.

Davidduke2000's picture

Went this morning to walmart to buy some seeds for my bird, the parking was almost empty and there was a single cash open for the entire store at 10:00 am.

what are these manufacturers are manufacturing ? and to who?? most stuff come from China.

tion's picture

Current retail/sales model is largely unworkable for MiA products, stuff is getting sold direct to consumer or marketed to rich yuppies and foreigners.

Would be really curious to see what the sales traffic looks like at a big box retailer across many different locations in the country, one that doesn't take EBT.  Maybe like Home Depot.  The one here is always booming, gets hard to find parking even, the one back home in middle America is like a ghost town even on the weekend.

surf@jm's picture

Yeah, the factory got smashed flat by the hurricane.........

But, the good news, is the new orders are piling up, even though we can`t fill them......

Tachyon5321's picture

This year, my son got multi-job offers after getting his degree in industrial engineering.  His resume had a 70% reply rate. Manufacturing cannot get enough engineers because they are automating the production lines and cutting cost.