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The IHS Markit Flash U.S. Manufacturing PMI rose from 55.3 in February to 55.7 in March, its best reading in three years. One of the key drivers of that higher headline number was employment (up from 55.0 to 55.6), with hiring continuing to expand strongly amid tightness in the overall labor market.

In addition, manufacturers were very optimistic about future output (up from 69.5 to 74.1), with that index rising to its highest point since February 2015. Interestingly, most of the other measures of activity eased in March, while remaining encouraging. This included new orders (down from 57.0 to 56.3), output (down from 55.5 to 55.2) and exports (down from 51.9 to 51.0). On the downside, raw material prices (up from 60.9 to 64.9) picked up in the latest survey, with costs expanding at rates not seen since September 2011.

Meanwhile, manufacturing activity in Europe slowed to an eight-month low despite continuing to show signs of modest growth overall. The IHS Markit Flash Eurozone Manufacturing PMI declined for the third straight month from 58.6 in February to 56.6 in March. The underlying data reflected decelerating activity across the board, including for new orders (down from 58.0 to 55.4), output (down from 59.6 to 56.1), exports (down from 57.0 to 54.7) and employment (down from 57.4 to 56.4). Manufacturers in Europe remain mostly upbeat production over the next six months, even with some more easing in the index of future output (down from 67.1 to 64.9). Input costs (down from 68.7 to 65.6) also remained highly elevated despite being somewhat slower in March.

In addition to data on Europe as a whole, IHS Markit also released figures for France (down from 55.9 to 53.6) and Germany (down from 60.6 to 58.4), both of which slowed to multi-month lows on weaker—but still reassuring —demand and output growth.

Final data on each of these surveys will be released on April 2.

The post IHS Markit: U.S. Manufacturing Activity Improved in March to a 3-Year High appeared first on Shopfloor.

The Kansas City Federal Reserve Bank said that manufacturing activity continued to expand strongly in March, with the composite index of general business conditions unchanged at 17. Employment (up from 23 to 26) remained one of the bright spots in the latest survey, with the index rising to a new all-time high in the survey’s 17-year history. This reflects an ever-tightening labor market, with the average workweek (up from 11 to 15) also widening to its best reading in seven years. At the same time, production (down from 21 to 20) and shipments (down from 24 to 12) slowed a little in March, with new orders (down from 16 to -1) contracting for the first time since August 2016. Exports (down from 2 to 1) were also softer than desired.

On the downside, the index for prices paid for raw materials (up 50 to 55) soared to its highest point since April 2011, mirroring other recent indicators showing accelerating input costs. Nearly 60 percent of the manufacturing leaders responding to the survey said that their raw material costs were higher in March, with just 4 percent noting reductions and 37 percent suggesting no changes. This is a trend that is expected to continue moving forward, with the forward-looking index for input costs (down from 73 to 72) edging down from a seven-year high but continuing to be very highly elevated. Accordingly, 74 percent of manufacturers in the Kansas City Fed district see raw material prices rising over the next six months, with 4 percent predicting declines for their firm.

Meanwhile, manufacturers remained upbeat about the next six months, even with some easing in March’s survey. The future-oriented composite index pulled back from February’s all-time high reading of 38 to 33 in March. Fifty-seven percent of respondents anticipate higher new orders, production and shipments in the coming months, with 47 percent and 42 percent seeing more employment and capital spending, respectively.

The post Kansas City Fed: Manufacturing Outlook Remained Very Optimistic in March, but with Accelerating Costs appeared first on Shopfloor.

Manufacturers appreciate lawmakers’ inclusion of the Clarifying Lawful Overseas Use of Data (CLOUD) Act in the FY 2018 Omnibus funding package.  This is a major victory for the delivery of strong standards and achieving much needed government-to-government cooperation to address new challenges presented by the digital age.

Digital information moves globally in ways that were never imagined decades ago. Current laws were written in 1986 and have not kept up to speed with technological advances and the connected world in which we live. Connected products, services and the technology of today demand a high level of certainty and stability so that the competitive needs of commerce are appropriately balanced with efforts to thwart international criminals and those who seek to harm our society.

The CLOUD Act provides law enforcement the tools they need to keep us safe and creates a legally responsible framework to address concerns of international customers and foreign governments to ensure the privacy and security of customer data. The NAM has been a stalwart advocate along with other industries and has previously praised the CLOUD Act in a letter to lawmakers.

Cloud computing is a major growth opportunity for U.S.-based companies selling software and services overseas and a growing technology backbone for small businesses and manufacturers across the United States who are seeking opportunities to sell into overseas markets. Ninety-five percent of the world’s customers reside outside the United States, and the appetite for American-made products and technology continues to be robust, increasingly helping to support well-paying jobs across the country. The CLOUD Act achieves the right balance, and manufacturers are pleased to see advocacy efforts come to fruition

The post FY 2018 Omnibus Offers Opportunity to Advance CLOUD appeared first on Shopfloor.

As the Centers for Medicare & Medicaid Services (CMS) closes in on finalizing anticipated 2019 changes to Medicare and several other CMS-sponsored programs, the NAM urges CMS to refrain from changing its “Any Willing Pharmacy” requirements. Employers and employees increasingly rely on Medicare, Medicare Advantage (MA) and Part D drug benefit programs for health coverage as some employers are sponsors of Part C and D plans for their retirees.

Competitive principles are a hallmark of the Part D program and have kept the program affordable for seniors over the last decade. This proposal directly conflicts with the Part D spirit and intent by adding new challenges and barriers to the establishment of preferred pharmacy networks. As stated in a public comment submitted earlier this year, we highlighted that preferred pharmacy networks allow for more streamlined management of pharmacy benefits by working to reduce fraud, waste, and abuse, lowering the cost of the benefit for all Medicare beneficiaries and promoting the delivery of high quality pharmacy services.

Most beneficiaries today choose to enroll in Part D plans with preferred pharmacies and this proposal would disrupt their coverage without producing a benefit. Manufacturers strongly support proposals to reduce soaring health care costs, improve the efficiency of the current system and enhance the quality of care. However, the proposed changes by CMS don’t meet those tests. A recent Oliver Wyman report confirms the value of preferred pharmacy networks in the Part D program and employers agree.

The post Manufacturers Urge Maintaining the Value of Present Part D Networks appeared first on Shopfloor.

This morning, Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a guidance memorandum fixing ambiguities in the air permitting process that have thwarted manufacturers from installing cleaner equipment. Today’s action clarifies how to properly account for project emissions under step 1 of New Source Review (NSR), a federal air permitting program under the Clean Air Act that applies to new facilities or major modifications to facilities. Until today, the EPA would allow only consideration of emissions increases when determining whether NSR applies, even for projects that had a net emissions decrease because old equipment was being upgraded to new equipment.

As the National Association of Manufacturers (NAM) told the Senate in testimony last fall:

An NAM member company manufactures gas turbine upgrade technology that could improve the vast majority of in-service gas turbines by 2.6 percent and reduce their total CO2 emissions per MWh by 6.5 percent; however, many manufacturers are choosing not to install this equipment simply because it triggers NSR. The same can be said for steam turbine upgrades, which would ensure higher grid efficiency, lower emissions and reduced wear and tear that is occurring from a rapidly changing electric grid.

There is no good reason for the permitting process to create unnecessary obstacles for a manufacturer that wants to make efficiency upgrades or install modern pollution control equipment. In fact, manufacturers have been leaders in this space, working to successfully reduce emissions while adding to the overall economy. The NAM has made NSR a priority in its regulatory reform filings with the EPA and the White House. It’s clear that Administrator Pruitt agrees and is committed to fixing the permitting process for manufacturers.

The post EPA Clears the Way for Cleaner Equipment at Manufacturing Facilities appeared first on Shopfloor.

Retail spending declined by 0.1 percent in February for the third straight month, starting the new year off with disappointing consumer data. Motor vehicle and parts sales were down 0.9 percent in February, decreasing for the fourth consecutive month, and one of the larger drags in the latest report. Along those lines, retail spending excluding automobiles was up 0.2 percent in February, extending the 0.1 percent gain seen in January. Despite the softer figures, the larger narrative remains an encouraging one, with consumers being a bright spot over the past year. Indeed, retail sales have risen 4.0 percent year-over-year in February, suggesting a decent pace overall even if it represented a deceleration from the more-robust rate of 5.9 percent in November. Excluding motor vehicles and parts, the pace was somewhat stronger, with retail sales up 4.4 percent over the past 12 months.

Retail spending data were mixed in February. The largest increases were seen in the following categories: sporting goods and hobby stores (up 2.2 percent), building material and garden supply stores (up 1.9 percent), nonstore retailers (up 1.0 percent), clothing and accessory stores (up 0.4 percent), food services and drinking places (up 0.2 percent) and miscellaneous store retailers (up 0.1 percent). In addition to declining motor vehicles sales, other segments with reduced spending in February included furniture and home furnishing (down 0.8 percent), general merchandise (down 0.4 percent), health and personal care (down 0.4 percent), electronics and appliances (down 0.1 percent) and food and beverage (down 0.1 percent) stores.

Over the past 12 months, the fastest growth in retail sales were in the following types of businesses: nonstore retailers (up 10.1 percent), gasoline stations (up 7.9 percent), miscellaneous store retailers (up 7.5 percent), clothing and accessory stores (up 4.9 percent), building material and garden supply stores (up 4.6 percent) and electronics and appliance stores (up 4.5 percent). The jump in sales for gasoline stations was boosted by higher prices.

The post Retail Spending Activity Off by 0.1% for the Third Straight Month in February appeared first on Shopfloor.