Ger30 Upbeat Despite The Contraction Of The Manufacturing Sector

In this month’s special questions, the firms were asked about changes in wages and compensation over the past three months as well as their updated expectations for changes in various input and labor costs for the current year. Nearly 79 percent of the firms indicated wages and compensation costs had increased over the past three months, 21 percent reported no change, and none reported decreases. Manufacturing activity in the region declined overall in July, according to the firms responding to this month’s Manufacturing Business Outlook Survey. The survey’s indicators for current general activity and new orders declined further into negative territory. The shipments index was positive and rose slightly, while the indexes for inventories and unfilled orders were negative. The future indicators suggest that firms expect overall declines in activity and new orders but increases in shipments and employment over the next six months. We acknowledge the key to resolving the next global supply chain crisis is to prevent it from happening in the first place.

  • Other measures of future manufacturing activity, like capacity utilization and new orders, pushed further positive in July.
  • Forex trading is challenging and can present adverse conditions, but it also offers traders access to a large, liquid market with opportunities for gains.
  • This aggravates recession fears, which are already heightened from the prospect of Russia cutting off gas supply to the continent, despite the resumption of Nord Stream 1.
  • In this month’s special questions, the firms were asked about changes in wages and compensation over the past three months as well as their updated expectations for changes in various input and labor costs for the current year.
  • The firms continued to indicate overall increases in employment and widespread increases in prices.
  • The outlook is grim, and I do not think reopening that site will be possible in the next six months, as client forecasting is very low.

The raw materials prices index fell 19 points to 38.4, a reading still above its average of 28.0 but far below its high of 83.3 last November. The finished goods prices index also moved down, from 33.8 to 29.3, remaining elevated but well below the highs seen last fall. The wages and benefits index came in at 38.1, down 12 points from June but still markedly higher than its 20.4 average. Labor market measures continued to indicate robust employment growth and longer workweeks.

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We feel some of this is just luck of getting some large jobs that are hitting at same time. Besides these jobs, our normal month-in-and-month-out work seems to have declined in both frequency and volume. We are not sure what this means for the future after these large jobs get processed. The volatility of oil prices has stopped the oil companies from spending money once again. Also, the political environment has added uncertainty to the business that did not exist a month ago. President Biden going overseas to beg for more oil supply instead of working with the domestic producers really adds uncertainty to the domestic producers and their budgets. This will affect our plans dramatically for expanding our business.

Customer inventories are at record levels, and the lists of “golden screws” continue to shrink. Automotive remains strong for now, but we expect will be the last to roll over, as they are the worst at supply-chain management. We have gotten stupid busy testimonials and will stay this way through July and August. We have some really large jobs coming up, making for hectic times on the plant floor. Additional supply-chain disruptions and longer lead times on materials and supplies are adding to the stress level.

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We are forecasting a slight increase in volume over the next six months due to increased promotional activity with retailers carrying our brand. We recently completed our fiscal year in June and extended an average 10 percent wage/salary increase for our team due to strong results and to help our team members navigate inflation. With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences. Predictability is important to resilient supply chains, and we will aim to work together to promote predictability, openness, fairness, and nondiscrimination in our economic relations as they impact our supply chains. We will aim to reinforce and foster our longstanding, rules-based economic partnerships and supply chain relationships. About 20 percent of our backlog was not taken by customers as ordered, but we were able find homes for that product and, therefore, continued to sell almost everything we produced.

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On balance, the firms continued to report increases in employment, but the employment index declined 9 points to 19.4, its lowest reading since May 2021. Nearly 24 percent of the firms reported employment increases, while 4 percent reported decreases; 72 percent reported no change in employment levels. The average workweek index decreased for the fourth consecutive month, to 6.4. Responses to the July Manufacturing Business Outlook Survey dotbig testimonials suggest overall declines in regional manufacturing activity this month. The indicators for current activity and new orders remained negative, while the shipments index rose slightly. The firms continued to indicate overall increases in employment and widespread increases in prices. The indicators for future general activity and new orders remained negative, suggesting that respondents expect overall declines over the next six months.

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