From earlier: Dallas Fed July manufacturing survey -17.5 vs -15.1 prior

• Prior was -15.1

Details:

• General business activity -17.5 vs -15.1 prior
• Company outlook -18.4 vs -6.9 prior
• Prices paid +23.1 vs +21.5 prior
• New orders -12.8 vs -1.3 prior
• Shipments -16.3 vs +2.8 prior
• Employment +7.1 vs -2.9 prior

Overall, the details and the commentary are notably worse than the headline.

I wonder if Hurricane Beryl affected some of these numbers because they’re not great. At the same time, for this week’s non-farm payrolls report, we could also see hurricane effects.

Comments in the report:

Food manufacturing

• We have seen a more stable market over the last six months for
  our products (which is primarily dinner sausage). Nielsen data for our
  category show small-to-moderate growth over the last 52 weeks, and our
  market share is growing in our core markets. This is leading to a more
  predictable environment for our company. Wages increased this month due
  to merit increases that we gave our team at the beginning of our fiscal
  year, which is July.
• The business environment feels stable, but beef prices continue
  to increase beyond typical seasonality due to supply constraints.
• The destabilization of our country and the politicization of things continue to impact our business.

Paper manufacturing

• Activity has slowed down, but we anticipate an uptick soon.

Printing and related support activities

• We have slowed down some from our very hectic pace of activity
  in late spring and through June. We hear about lots of slowness in our
  industry, but we continue to be pretty busy, mainly with larger jobs but
  then also with other smaller ones. We have a very large capital
  purchase machine arriving in early October. We are hopeful that the
  Federal Reserve will have a rate cut and that general business activity
  will pick up. We are actually seeing some reduction in prices and are
  hopeful we will not need to raise prices next year.

Fabricated metal product manufacturing

• Hurricane damage and power outages have decreased production.
• Customer demand is the overriding concern. Decreased credit
  availability and affordability for the markets we sell into have all
  but stopped demand. I estimate we are operating at 30–40 percent
  capacity.
• Order volume continues to see small declines. Inefficiencies in
  the short term will require staffing adjustments over the next few
  months to align with the new lower baseline. There is no major change
  to our long-term outlook; we are still viewing the current pullback as
  temporary, and we maintain a positive outlook beyond the next 12–24
  months.

Machinery manufacturing

• Elections [are an issue affecting our business].
• Business activity is horrible, and we are seeing no signs of improvement.
• Inquiries and orders activity has seemingly halted. The brakes
  are on. This is pretty common in presidential election years, but this
  comes at a time when things were already volatile due to price
  pressures and massive inflationary pressures.
• At this point, we’re just hoping for a favorable election
  outcome and looking forward to 2025. The summer doldrums have hit hard
  and would appear to be unrelenting with respect to what we see in our
  crystal ball. We have some small jobs to complete, and we’re searching
  wider and further for new work, but we have yet to strike gold.

Computer and electronic product manufacturing

• Many customers are holding off on expenditures as well as
  allowing for cost-of-living adjustments to prices. The market continues
  to be soft, and with uncertainty in the election year, even our federal
  business is a bit stagnant.
• We need lower interest rates, so end customers resume buying capital equipment again.
• We typically see weakness in presidential election years as
  companies sort through uncertainty or slow down during those periods.
  With the recent events involving both presumed candidates, that
  uncertainty has increased, which makes it very difficult to guess what
  might happen. Our business is likely to be impacted by tariff policies
  in a negative way because some projects potentially will go away
  entirely. For businesses we serve that ship to other countries, we have
  already lost sales because it is more affordable to build those
  products outside the U.S. for consumption outside the U.S. That was not
  the case before tariffs entered the equation. We were able to build
  products for shipment to other parts of the globe. Both [political]
  parties have shown a willingness to maintain and increase tariffs, which
  could negatively impact our sales.
• We are expecting to see stronger signs of a cyclical recovery
  in industrial and automotive markets, which have not materialized, yet.
  This is leading to higher uncertainty that the recovery may be delayed
  or muted.

Transportation equipment manufacturing

• While we still have a large order backlog, new orders are
  significantly below where we forecasted them to be this year. This will
  shorten lead times and should allow us to pick up additional orders
  next year.

Miscellaneous manufacturing

• Customer demand is softening. We are also experiencing increasing unfair competition directly from China.
• Due to the hurricane and not having power for over a week, we had significant lost production hours.

This article was written by Adam Button at www.forexlive.com.