'Soft' survey data in June has collapsed. On the heels of the plunge in Empire Fed Manufacturing and Philly Fed, Dallas Fed Manufacturing survey just crashed from -5.3 to -12.1 (worse than the weakest analyst estimate) and lowest since June 2016.
Worse still 'hope' has plunged into the negative...
Respondents are not happy:
"I don’t care what the indicators say—things are slowing down in energy and manufacturing. Construction is still strong(ish). But, customers are shopping every nickel, quoting and requoting; no one wants inventory. Steel prices are dropping like a rock due to lack of demand and overcapacity. It is rough waters right now, for the last 60–90 days."
"China tariffs are a big drain on profits, so we are covering with a general price increase July 1. Future improvements are expected due to new product introductions."
"We cannot explain it, but we have gotten stupid slow, with incoming orders lagging way behind last year to date. At this rate, this will be the lowest year in over 15 years. All of our customers are complaining about being slow. Perhaps the economy is not in as good a condition—with all the uncertainty coming from Washington, D.C., people are afraid to pull the trigger on projects. Then adding on to our issues, San Antonio is about to implement mandatory paid sick time for hourly workers, adding even more pressure on profits, as we predict there will be widespread abuses of this. Most likely, this will result in a reduction in the workforce to cover the cost."
"We need all the Democrats and all the Republicans to get on board with efforts to improve trading agreements and open foreign markets to U.S. business. Foreign governments won’t cooperate if we are divided and they think political change will allow them to keep taking advantage of our country’s historically bad trade deals. This political gridlock is hurting American business interests, and the tariffs and fear of increasing tariffs are not good. It is time we get fair trade, and we need everybody working together for the good of the country."
We note that margin pressure is reasserting itself (Prices paid for raw materials 16.4 from 7.4, Prices received for finished goods 1.2 from 0.7)
Finally there is one silver lining:
"Military apparel orders appear to be strong for the next 12 months. "
As always, war is a racket.