Manufacturing Growth Streak Hits 24 Months, Office Use Shows Slight Decline, Job Openings Stay Near
Manufacturing Growth Streak Hits 24 Months
Despite lingering supply chain bottlenecks, the nation’s manufacturing economy expanded for the 24th consecutive month in May, according to a widely watched index that reflects industrial property demand.
The Institute for Supply Management, which researches production and distribution operations, said its monthly manufacturing index, based on surveys of purchasing managers, registered 56.1% for May, up seven-tenths of a percent from the prior month. Numbers above 50% indicate expansion in the overall manufacturing economy, and this has now happened for two full years after a fall-off in the early days of the pandemic.
Metrics contributing to the May expansion over April included new orders, production output, inventories of supplies and raw materials, and exports. Among the downsides for manufacturers: Employment contracting, supplier deliveries and price increases are all slowing, and cautious companies on average are now anticipating an index record 178 days of lead time for capital spending, up five days from the April survey.
“The U.S. manufacturing sector remains in a demand-driven, supply-chain-constrained environment,” Timothy Fiore, who chairs the Tempe, Arizona-based institute’s survey committee, said in a statement Wednesday. Fiore noted companies have improved their pace of hiring to deal with moderate-term labor shortages at all tiers of the supply chain.
Fifteen manufacturing industries reported growth in May, led by apparel, leather products, printing, industrial machinery and nonmetallic mineral products. The only industry reporting a decrease from April was furniture and related products, the institute reported.
Office Use Shows Slight Decline
Office use in some of the nation’s largest cities declined slightly in the final week of May, as workers headed into the Memorial Day weekend.
The latest Back to Work Barometer from security technology provider Kastle Systems, gauging average occupancy in 10 cities where the firm has a large client base, was 42.9% for the week ended May 25, down four-tenths of a percentage point from the prior week.
Based on anonymous keycard data from its office property clients, the numbers for most cities have held basically steady for the past month, though most regions tracked in the barometer have yet to hit 50% office use since the start of the pandemic. Austin, Texas, fell 2.7 points to 58.5% use but still leads among cities tracked, followed by Houston at 56% and Dallas at 51.3%
Outside of Texas, the biggest office use rates in the latest numbers were seen in Los Angeles at 41%, Chicago at 40% and Washington, D.C., at 39.1%
Job Openings Stay Near Record High
The number of U.S. job openings declined 455,000 or 4% from the prior month in April, but at 11.4 million remained close to record highs in a tight employment market, the Labor Department reported Wednesday. The record was 11.9 million openings, reached in March.
April hirings of 6.6 million were little changed from the prior month. In the separations category, the 4.4 million voluntary resignations was on par with the prior month, while layoffs edged down to 1.2 million, a record monthly low since the metric was first tracked by the government.
The Labor Department said the biggest increases in job openings during April were seen in transportation, warehousing and utilities which rose by 97,000, with nondurable goods manufacturing up 67,000 and durable goods manufacturing rising 53,000 openings.
The largest decreases in openings occurred in the healthcare and social assistance category, which was down 266,000 openings. Openings in retail trade were down 162,000 and accommodation and food services declined 113,000.
For the 12 months ended in April, the U.S. saw a total of 78 million hires and 71.6 million separations, yielding a net employment gain of 6.4 million. The nation’s unemployment rate remained historically low at 3.6% as of April.