Glass Half Empty for Manufacturers, But Are Things Turning Around?

Two recently released manufacturing indexes reveal that industry leaders have grown more pessimistic, though some are holding out hope for better business conditions in the future.
For the fourth straight quarter, NAM’s Manufacturers’ Outlook Survey finds that positive sentiment among manufacturers has diminished, with mounting concerns about the business climate and interest rates.

• Business outlook is the lowest it’s been since 2012: 59.3% of manufacturers today are somewhat or very positive regarding their companies’ business outlook, down from 67.3% last quarter
• 77% cite an unfavorable business climate as their top business challenge
• 81% feel the United States is on the wrong track
• Most manufacturers are just holding steady on their workforce, capital investments, or inventory; some are decelerating in these areas, while the majority are ‘staying the same’: 42.5% not increasing or decreasing their capital investments, 47.5% not increasing or decreasing inventory, and 48% not adding or subtracting employees
• 60.7% except up to a 3% increase in employee wages, excluding nonwage compensation

Another survey showed some progress, but not enough to move the needle in terms of industry improvement.
The New York Federal Reserve Empire State Manufacturing Survey found that activity declined for a fifth consecutive month for New York manufacturing firms, but at -4.6, the general business conditions index was six points above its November level of -10.74, indicating that the pace of decline moderated somewhat.
The index for future business conditions jumped to 38.51, up from 20.33 when reported in November.
Other findings from forward-looking indicators:

• Index for expected number of employees little changed at 15.2
• Index for expected workweek rose to 10.1, up from 5.45
• The capital expenditures index advanced three points to 16.2
• The technology spending index increased seven points to 9.1