Executive Briefings

U.S. Manufacturing Sector Seems to Be Contracting

Demand for long-lasting manufactured products made in the U.S. fell 5.1 percent in December from a month earlier, and declined 3.5 percent for all of 2015, the Commerce Department said. The annual decline in durable-goods orders is the largest outside a recession on records back to 1992.

The figures add to mounting evidence the manufacturing sector is contracting. And with the dollar strengthening further this month and financial-market tumult likely threatening business confidence, a factory slowdown could last well into this year.

The Commerce Department's release is in line with data from Institute for Supply Management, a group of purchasing managers, showing a nearly three-year-long expansion in manufacturing came to an end in November. And the Federal Reserve's reading on industrial production has declined in 10 of the past 12 months, putting it off nearly 2 percent from its peak in December 2014.

A number of forces hampered U.S. factories last year. An economic slowdown in China, Brazil and other markets for U.S. goods limited foreign demand. Meanwhile, a stronger dollar made U.S. goods more expensive overseas and foreign products relatively more affordable for American consumers. And a pullback in U.S. oil production last year reversed a recent source of strength for many metal and equipment makers.

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The figures add to mounting evidence the manufacturing sector is contracting. And with the dollar strengthening further this month and financial-market tumult likely threatening business confidence, a factory slowdown could last well into this year.

The Commerce Department's release is in line with data from Institute for Supply Management, a group of purchasing managers, showing a nearly three-year-long expansion in manufacturing came to an end in November. And the Federal Reserve's reading on industrial production has declined in 10 of the past 12 months, putting it off nearly 2 percent from its peak in December 2014.

A number of forces hampered U.S. factories last year. An economic slowdown in China, Brazil and other markets for U.S. goods limited foreign demand. Meanwhile, a stronger dollar made U.S. goods more expensive overseas and foreign products relatively more affordable for American consumers. And a pullback in U.S. oil production last year reversed a recent source of strength for many metal and equipment makers.

Read Full Article