Dallas Fed manufacturing
- General business activity: -9.7 vs -17.5 prior
- Company outlook: -9.6 vs -18.4 prior
- Prices paid: +28.2 vs +23.1 prior
- New orders: -4.2 vs -12.8 prior
- Shipments: +0.8 vs -16.3 prior
- Employment: -0.7 vs +7.1 prior
These are decently-hot numbers. This isn't a market mover but it speaks to the steady state of the economy rather than a looming recession. Note though that other regional manufacturing numbers have been softer whereas Texas is highly dependent on energy.
Comments in the report:
Food manufacturing
- Suppliers are demanding longer lead times. Some commodity prices have declined, but value-added items (packaging film) are seeing price increases. We’ll have an annual wage increase in October in the range of 3 to 8 percent. Wages for positions requiring physical work are increasing more than desk jobs.
- Agriculture is hurting. No farm bill, weather and falling prices for our commodities while input costs increase are putting a big squeeze on our industry.
- We are preparing for the recession.
- As the economy weakens, we are seeing modest growth in our category of dinner sausage. This category tends to grow when the economy weakens, as sausage is a good protein substitute for higher-priced proteins and can "stretch" consumers’ food budgets. Additionally, we are expanding our presence in other sales channels, such as food service, which we believe will help our sales in 2025.
Textile product mills
- Uncertainty is high, and we are very unsure how the next quarter will go.
Paper manufacturing
- Things are soft but steady.
Printing and related support activities
- We have a new large-machinery line arriving at the end of September that will complement our current line that is getting long in the tooth. It's a huge investment for us, and I'm worried that with business activity slowing down, we may be in for some rough waters for a while. It should generate some healthy activity, and we know it will be much more efficient than our current line.
Chemical manufacturing
- Difficulties in ship travel to the Red Sea area have made it difficult to secure ships for bimonthly/quarterly shipments.
- Turbulence in the market, increased global instability and further concerns over U.S. political instability in the current administration have all fueled further weakening in the market.
Plastics and rubber products manufacturing
- Heading into the holiday season with an election in the near future, our customers are beefing up supplies from China for the near term but hitting pause beyond that.
Primary metal manufacturing
- Incoming orders continue their downward trend. Most of our customers are reporting few orders on their end, especially our building and construction customers, as well as the ones in the transportation segment (trailers). We continue to be negatively affected by foreign competition at much lower price offerings than we can meet.
- Our company is spending significant capital dollars to bring a new product line to our manufacturing operations. This will allow us to enter markets we currently do not service.
Fabricated metal product manufacturing
- The hurricane interruption caused us to miss two weeks of production.
Machinery manufacturing
- The slowdown is settling in with business activity at a very low level.
- Things are just plain bad all over. There is no skilled labor available.
- Our business usually has seasonal decreases in the summer months, but the decrease this summer is more significant than usual. We are now not so sure about the future.
- November cannot come soon enough! We've stagnated as has our competition along with our customer base. It's like we all know the world will continue regardless of who wins, but we're all sitting on our hands until a winner is announced.
Computer and electronic product manufacturing
- It appears the industry is approaching a cyclical bottom; we see signs of several markets beginning to correct. Regionally, China was strong, U.S. was OK, Europe was weak, and Japan was very weak.
- We are getting more resistance to higher prices from our customers. We are also seeing orders reduced or delayed from a few of the more price-sensitive ones. The biggest uncertainty is about the election; a lot of our customers are taking a "wait and see" approach. All small business owners that I talk to are very concerned about the high-tax, anti-growth and anti-small business policies that [we think] are certain to come from a [Kamala] Harris presidency.
Furniture and related product manufacturing
- We are experiencing slower pay on accounts receivable. There is a continued shortage of skilled carpenters and saw operators. Project size has increased from general contractors. Inexperienced architects and construction project managers cause significant construction timeline delays.
Miscellaneous manufacturing
- It is increasingly looking like the U.S. has lost its position of strength in geopolitics, and the vacuum is encouraging war and violence, which pose significant risk to international trade and reduce opportunities for U.S. companies. Anti-business, tax and spend rhetoric is not conducive for long-term investments and is going to further reduce U.S. business competitiveness especially against China’s government-supported industries and firms.
