Monday, July 17, 2006

Empire Manufacturing Decelerates, Industrial Production Rises, Capacity Utilization Increases

- Empire Manufacturing for July fell to 15.6 versus estimates of 20.0 and a reading of 29.0 in June.
- Industrial Production for June rose .8% versus estimates of a .5% increase and a .1% gain in May.
- Capacity Utilization for June rose to 82.4% versus estimates of 82.0% and 81.8% in May.
BOTTOM LINE: Manufacturing in New York state expanded at a slower pace in July as fewer factories reported increases in orders and sales, Bloomberg reported. The component measuring the outlook for six months from now increased to 44.8 from 33.7 the prior month. The new orders component fell to 10.3 from 25.8 the prior month. The prices paid component fell to 50.5 versus 52.9 in June. I expect manufacturing to continue to slow to more average levels.

Industrial Production in the US rose more than forecast last month as an unseasonably warm June boosted electricity use and factories turned out more communications equipment, Bloomberg reported. Production of consumer durable goods, which includes electronics, automobiles and furniture, rose 2.2% versus a .5% fall the prior month. I expect production and capacity utilization to begin decelerating modestly next month.

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