June 2024 Manufacturing Business Outlook Survey

June 2024 Manufacturing Business Outlook Survey

Note: Survey responses were collected June 10-17.

Manufacturing activity in the region remained broadly stable overall, according to companies that responded to the June report. Manufacturing Business Outlook Survey. The survey's overall activity indicator dipped slightly but remained positive, while the shipments and new orders indices remained negative. The employment index increased but remained negative, which continues to suggest an overall decline in employment levels. Both price indices continued to indicate overall price increases. Most indicators of future activity remained positive, but suggest less widespread expectations for overall growth over the next six months.

Current indicators are mixed

The current general activity diffusion index fell three points to 1.3 in June, its lowest reading since January (see Chart 1). Twenty-four percent of businesses reported increases in overall activity this month, while 23 percent reported decreases; 50 percent reported no change. The new orders index recorded a second consecutive negative reading, but went from -7.9 in May to -2.2 in June. The current shipments index fell 6 points to -7.2, its lowest reading since December.

As a whole, companies continued to record a decline in employment. The employment index rose 5 points to -2.5 in June, its eighth consecutive negative reading. Most companies (74 percent) continued to report no change in employment, while the proportion of companies reporting decreases (14 percent) slightly exceeded the proportion reporting increases (11 percent). The average workweek index increased from -8.3 to 4.8.

Companies report general price increases

Companies reported price increases across the board in June. The prices paid index increased 4 points to 22.5 (see chart 2). Nearly 26 percent of companies reported increases in input prices (up from 19 percent last month), while 3 percent reported decreases (up from 0 percent); 71 percent reported no change (compared to 78 percent). The index of current prices received increased 7 points to 13.7. Nearly 14 percent of companies reported increases in the prices of their own goods, no companies reported decreases, and 86 percent reported no changes.

Companies report higher production, little change in capacity utilization

in this month special questions, companies were asked to estimate their total production growth for the second quarter ending this month compared to the first quarter of 2024. A higher proportion of companies reported an increase in production (50 percent) compared to the proportion reporting a decrease (25 percent). ). Looking at companies' capacity utilization for the current quarter and a year ago, the reported median current capacity utilization rate among responding companies remained unchanged at 70 to 80 percent.

Most companies reported that labor supply was at least a slight constraint on capacity utilization in the current quarter, and the proportion of companies reporting it as a moderate or significant constraint (27 percent) decreased since asked this question in March (38 percent). More than 15 percent of companies cited energy markets as being at least slightly constraining in the current quarter, up from 3 percent in the previous quarter. Looking ahead to the next three months, most companies expect the impacts of various factors to remain the same. However, the proportion of companies expecting labor supply impacts to improve (6 percent) was lower than when this question was asked in March (12 percent).

Most future indicators remain positive

The future general activity diffusion index fell from a reading of 32.4 in May to 13.8 in June, its lowest reading since February (see chart 1). More than 32 percent of companies expect an increase in activity over the next six months, surpassing the 19 percent who expect a decrease; 47 percent do not expect any change. The new future orders index fell 24 points to 16.2, and the future shipments index fell 46 points to -0.1. Businesses continue to expect overall employment growth over the next six months, and the future employment index fell from a reading of 21.7 to 19.0. The index of future prices paid increased from 35.4 to 56.3, and the index of future prices received increased from 31.4 to 58.8. The future capital expenditures index decreased 8 points to 12.1, its lowest reading since January.

Summary

Responses to the month of June. Manufacturing Business Outlook Survey suggest largely stable regional manufacturing activity overall this month. The current activity indicator fell but remained positive. The shipments index fell back into negative territory and the new orders index remained negative. Overall, companies continued to report declining employment and current price indices suggest overall price increases. Most of the survey's broad indicators of future activity fell but remained positive, suggesting less widespread expectations for growth over the next six months.

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