More good news on the manufacturing front. This morning’s Chicago PMI hit a 20 year high as the boom in manufacturing continues to roll on. The January index hit 68.8. Not surprisingly, this was “better than expected” with analysts looking for just a 65 reading. The report was strong across the board:
- PRICES PAID indicated increased inflation, increasing to the highest level since July 2008;
- EMPLOYMENT strengthened to a height not seen since May 1984;
- NEW ORDERS increased to the highest point since December 1983;
- PRODUCTION improved with NEW ORDERS to the strongest level since 2004;
Comments from respondents of the survey were more mixed than the data, with rising input costs causing some concerns:
1. ―Lots of commodities price rising – steel, tin, aluminum, paper. Has not impacted sales though – have had large increase in orders.
2. ―Commodity inflation hurting profits, no pricing power with our customers.
3. ―Prices seem to be heating up, many suppliers are knocking on the door right now.
4. ―Some suppliers are holding prices to remain competitive, but others who have little to no competition in their sector are talking some significant increases in 2011. We are negotiating to keep those increases to a minimum.
5. ―Steel prices are going crazy
6. ―Business has increased mostly overseas higher prices, especially copper will kill us figure our cost has increased 40% same as oil too many speculators buying
7. ―Unfortunately the magic allure of a new year has not brought about improved service and pricing. Suppliers are continuing with pressures of increased pricing, decreased service levels and extended lead times.
8. ―Local foreclosures continue unabated. Small to medium sized business lending picking up slightly but remains very competitive due to lack of credit-worthiness of many of those businesses.
9. ―Business continues to improve. We have concerns about available experienced personnel to hire as well as pressures on capacity.
10. ―Business remains steady, orders are firm from month to month, back log remains solid…
11. ―Orders continue to come in spurts. No orders for 3 or 4 weeks then 3 or 4 in 1 week. The important thing is that the backlog is growing. The quote action is continuing strong.
12. ―The company for which I work overall revenues has increased by 34%. We are sheet metal fabrication job shop, customers are predominantly OEM Equipment manufacturers and Packaging.
13. ―Very good start to 2011 !
See the full report here.