For May 2015 industrial production increased 0.3%, after six consecutive monthly declines. Manufacturing output was flat, while mining and utilities output advanced 1.0% and 1.5%, respectively. Total industrial production in June 2015 was 1.5% higher than the same month a year prior, while industrial capacity utilization increased 0.2% to 78.4%, which is 1.7% below its 1972 to 2014 average.
The Purchasing Manager Index (PMI) rose 0.7% in June to 53.5%, with a value above 50 signifying expansion in the manufacturing industry. Aside from the oil and gas market, the sentiment regarding business conditions is steady to improving. The automotive sector continues to provide firm demand for metal products while defense spending is up slightly. June’s PMI reflects growth in 11 of 18 manufacturing industries including electrical equipment, appliances & components; transportation equipment; fabricated metal products; miscellaneous manufacturing; and chemical products.
The Consumer Confidence Index climbed to 101.4 in June 2015 following May’s moderate increase. Consumers are gaining confidence in current business and labor conditions, which has contributed to a brighter short-term economic outlook. Earnings prospects are flat to slightly improved, with the proportion of those expecting an income reduction lessening slightly. In general, consumers are more optimistic which could result in more spending in the near future.
New orders for manufactured durable goods in May 2015 slid 2.2% or $5.0 billion to $227.6 billion, marking a third decrease in the last four months. Transportation equipment drove the decline, falling 6.5% or $5.0 billion to $71.6 billion. May’s shipments of manufactured durable goods, down four of the past five months, dipped 0.3% or $0.7 billion to $239.2 billion.
According to the third estimate, real Gross Domestic Product (GDP) declined at an annual rate of 0.2% in Q1 2015, versus 2.2% growth in Q4 2014. In the second estimate, real GDP was projected to have decreased by 0.7%, however the downturn in exports was determined to be less significant based on more complete source data. The Q1 2015 contraction in GDP was attributed to losses in exports, nonresidential fixed investment, and state and local government spending, as well as increased imports. These negative factors were partially offset by gains in personal consumption expenditures, residential fixed investment and private inventory investment.
In June 2015, the chemical and allied products PPI increased to 268.2 from May’s reading of 264.5.