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NAM: Monday Economic Report

  • In the latest NAM Manufacturers’ Outlook Survey, 87.6% of respondents said they feel either somewhat or very positive about their company’s outlook, the highest level in two years. The outlook bounced back from the 33.9% reading in the second quarter of 2020, which was the worst reading since the Great Recession. Medium and large manufacturers were more upbeat in their outlook than smaller firms.

  • Roughly two-thirds of manufacturers expect to return to pre-pandemic levels of revenue by the end of 2021, with one-third saying that their revenues had recovered by the end of 2022.

  • Cited by 76.2% of respondents, rising raw material costs topped the list of primary business challenges in the first quarter. Although 65.8% of those completing the survey consider the inability to attract and retain talent as their top challenge, this issue dropped to second place.

  • Producer prices for final demand goods rose 1.4% in February, matching the record monthly pace seen in January. Excluding food and energy, producer prices for final demand goods increased 0.3% in February. Costs for transportation and warehousing rose 1.1% in February, extending the 1.3% gain seen in January.

  • Over the past 12 months, producer prices for final demand goods and services jumped from 1.7% year-over-year in January to 2.8% in February, the biggest increase since October 2018. Likewise, core producer prices have risen 2.2% since February 2020, up from 1.9% in January (seasonally adjusted) and the fastest pace since May 2019.

  • While consumer prices rose 0.4% in February, the fastest monthly gain in six months, pricing pressures at the consumer level have stabilized in recent months. Core inflation increased 1.3% year-over-year in February, down from 1.4% in the prior report. It will be interesting to see how this will impact consumer prices moving forward, at least in the short-term, with raw material costs rising more sharply.

  • The January survey reported 515,000 manufacturing job openings. Over the past six months, postings in the sector have averaged more than 505,000 each month, including October’s reading, which hit a record high at 545,000. These data offer an encouraging sign that manufacturers are confident enough in the economic outlook for their businesses to post new jobs.

  • In the larger economy, nonfarm business job openings increased to 6,917,000 in January, a 12-month high and the best reading since the COVID-19 pandemic began. January’s postings translate to 1.46 unemployed workers for every one job opening in the U.S. economy.

  • Consumer confidence rose to a 12-month high, according to the University of Michigan and Thomson Reuters, buoyed by increased vaccinations and a stronger economic outlook.



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