Wednesday, April 1, 2020
Manufacturers Are Restructuring Supply Chains as They Brace to Tackle the Needs for Battling COVID-19
Manufacturers in March broadly reported weakening business conditions as a result of large parts of the world’s economy being forced to shutdown in order to battle COVID-19.
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Tuesday, March 31, 2020
Durable Goods Spending Growth 7.8% in February
Even though the real 10-year Treasury rate declined in 2019 and early 2020, which should lead to accelerating growth in durable goods spending, it is possible that there will be contraction in March and very likely there will be contraction in April due to the COVID-19 shock.
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Tuesday, March 31, 2020
Income Growth Slowing Ahead of COVID-19 Shock
The annual rate of growth decelerated to 2.7%, falling below 3% for the third month in a row. Also, it was down from its peak rate of growth of 4.0% in December 2018 and the slowest rate of growth since October 2017.
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Monday, March 30, 2020
Manufacturers Begin Making Significant Adjustments to Production
Ripple effects, effects that manufacturers could not tie directly to COVID-19 but believed to be a result of the pandemic, were experienced by 46% of manufacturers. Supplier lead times and supplier accessibility/responsiveness were the changes experienced that increased the most, with roughly 40% of manufacturers experiencing changes to both.
Ripple effects had a slightly more significant impact as the percent reporting these as major impacts increased to 31% from 26%. The impact on supplier lead times was more severe (major impact increased to 47% from 38%); however, the impact on supplier accessibility/responsiveness was even more severe (major impact increasing to 41% from 24%).
The percent of manufacturers adjusting budgets/spending, hiring/recruiting, and staffing/headcount increased notably as more than 30% of manufacturers made adjustments here. However, production/capacity changed more than any other adjustment from the prior week. Last week, 32% of manufacturers adjusted production/capacity compared with 15% the previous week.
This week 51% of manufacturers reported that the impact of contingency/backup plans were major versus just 35% the week prior. The change in impact of budgets/spending changes was very similar. The most significant change came in the severity of changes to production/capacity. This week, 63% of manufacturers reported the adjustment as having a major impact compared with 31% the prior week.
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Friday, March 27, 2020
Housing Permits Grow Faster than 12% for Third month
The change in the 10-year Treasury rate is a good leading indicator of housing permits and construction spending. A decreasing year-over-year change in the real 10-year Treasury rate should lead to increases in these data points down the line.
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