IndustryNet Account
For Buyers:
  • View Search History and Save Searches
  • Save Supplier Listings and Add Notes
  • Save and Review RFQs / RFIs / RFPs
For Suppliers:
  • Update Your Listing Information
  • Upgrade Your Listing or Add Categories
  • View and Respond to Leads

 Keep me logged inForgot?

Don't have an account? Create a FREE account now!
close
IndustryNet
      

IndustryNet Blog

The Big Picture Report on U.S. Manufacturing Conditions (June 2020)

Posted by IndustryNet on Tuesday, June 16, 2020

Male manufacturing worker in a black mask works on a machine in a factory.

U.S. manufacturing business conditions improved slightly in May, with several new reports pointing to a slow climb back from April’s historic losses.

As U.S. industrial companies start to reopen following the protracted shutdowns caused by the coronavirus pandemic, jobs are beginning to return and industrial production is starting to climb its way back to normal.

At MNI, we’ve seen a hopeful uptick in sourcing activity, with the industrial marketplace IndustryNet showing searches for domestic parts and supplies trending up significantly over this time last year, as more manufacturers look for suppliers close to home.

Today, we’re going to take a look at the most recent economic reports as they relate to manufacturing to bring you the big picture overview of business conditions at present.

Manufacturing Output Long Way Off Normal, But Eases Off Historic Drop

In April, industrial production cratered 11.2% -- a drop not seen since the Federal Reserve started collecting data 101 years ago, while manufacturing production tanked 13.7%, also the Fed’s largest decline on record.

However, the losses appeared to have stopped there.

May’s industrial production report, released June 16th, found total industrial production edged up 1.4% over the month as more and more manufacturers restarted production.

Notably, however, industrial production is a far cry from normal, with output stuck at 15.4% below pre-pandemic levels. Taken alone, manufacturing output edged up 3.8% from April’s record low, but is 16.9% below February’s reading, directly preceeding the coronavirus outbreak in the United States.

Industrial output is expected to continue to increase as more industrial companies reopen, but many are concerned over the length of time needed to recover pre-pandemic output levels. All eyes will be on the next industrial production report, due out in mid-July.

Taking a closer look at specific industry data provided by the Federal Reserve, a significant increase in motor vehicles and parts production led the hike in manufacturing output, increasing 120% from April’s historic drop, but still more than 60% below pre-COVID levels.

Most other industries posted significant gains over April, while some continued to slide. Most notably, production shot up 20% in apparel and leather, while textile and apparel gained 10% over April. Plastic and rubber products increased 9.6%; printing and support activities edged up 9% and non-metallic mineral products added 8.7%.

Industries that posted losses in output included primary metals (-4.8%); computer and electronic equipment (-2%) and machinery (-1.2%).

Manufacturing Employment Bumps Up

Following April’s historic job losses, May’s jobs report came as welcome relief, with the sector recouping 225,000 of the 1.3 million manufacturing jobs shed the previous month. These wild swings in employment have previously not been seen in U.S. history, reflecting the extreme impact the COVID-19 pandemic had on the sector.

Like industrial production, U.S. manufacturing employment is better than last month, but levels are still nowhere near where they were prior to the pandemic.

In May 2020, manufacturing job gains were seen across the board, but as with industrial production, gains were led by durable goods manufacturers like those producing motor vehicles and parts.

The motor vehicles and parts industry added 27,700 jobs. Fabricated metals also posted a significant gain, up by 24,800 jobs.

In the non-durable goods category, plastic and rubber products led the way with a gain of 29,800 jobs and food processing added another 24,900.

Just six sectors lost jobs in May (compared to most sectors in April), with losses led by electrical equipment and supplies (-15,300 jobs); primary metals (-9,400) and computer & peripheral equipment (-5,000 jobs).

Manufacturing Activity: Down is the New Up

The ISM’s May report on business found U.S. manufacturing activity eased off April’s historic losses, still contracting, but at a slower rate than in April.

U.S. manufacturing activity now stands at 43.1%, which is 1.3% higher than April’s reading, but still well below the 50% mark that indicates expansion in the sector.

New orders increased 4.7%, while production edged up 5.7%. The ISM’s employment rose by 4.6%. All three metrics, however stand at the 31-33% range, far below the expansionary 50%.

New York Region Bounces Back

Released June 15th, the regional survey found manufacturing conditions in the state of New York stabilized in June after “deteriorating significantly” in the month of May.

After hitting historic lows last month, the index regained 48 points and now sits slightly below expansion at -2. New orders were virtually unchanged but shipments gained traction in June.

Notably, many executives surveyed continued to be optimistic that conditions would improve within the next six months.

Related: Top 10 Manufacturing Companies in New York

Trusted Solutions for Your Industrial Business

At MNI, our mission is to help U.S. businesses thrive, providing tried-and-true prospecting and procurement solutions since 1912.

Powered by trusted MNI data, IndustryNet is an industrial marketplace that connects industrial buyers with 400,000 U.S. manufacturers and suppliers of more than 10,000 types of products and services. Set up a free account, search for suppliers, send quote requests and more with this free industrial marketplace.

IndustryNet is also a direct path for U.S manufacturers to increase their visibility among domestic procurers.

MNI also makes it easy for industrial companies to expand into new markets. Click here to learn about how an IndustrySelect subscription can help you develop the right pool of leads for your product or service.

 

Download the FREE eBook:
Cost-effective Industrial Sourcing, an Insider Guide
Cost-effective Industrial Sourcing, an Insider Guide
A must-have guide for engineering, operations, & purchasing executives!
Finding the right industrial supplier and related services can be a costly and tedious process. This free eBook will introduce you to the industrial sourcing process. Expert advice to help you:
  • Explore some innovative methods for uncovering new suppliers
  • Discover the 7 crucial questions you need to ask a potential supplier
  • Learn how to zero in on a supplier's capabilities to help you make an informed decision



Instant download! Enter your information above for instant access to the eBook. Plus, receive a free subscription to IndustryNet Insider.
A service of MNI
 Find a Supplier  About IndustryNet  Contact IndustryNet
 Get a Quote  Buyer Reviews  Link to IndustryNet
 IndustryNet Blog  Marketing Solutions  Terms of Use
 Create Free Account  Add or Upgrade Listing  Legal Information
 Account Log In  Browse All Categories  Privacy Policy
 ISO Standards & Certifications  Browse All Companies  Do Not Sell My Personal Information