A growing money supply tends to correlate with increases in capital equipment consumption.
In the third week of the of the COVID-19 survey, manufacturers started making more significant adjustments to contingency plans, budgets/spending, and staffing/hiring. However, production and capacity were relatively unchanged.
January’s unit orders were the lowest since January 2017. Orders for the month contracted 30.3% compared with year ago.
The month-over-month rate of contraction in durable goods capacity utilization slowed for the fourth month, which is a positive sign for manufacturers.
While industrial production data for February was just released and a lot has changed since February, the data might contain a few signs of what industries will do well despite COVID-19.
In the second week of a survey on COVID-19, manfuacturers reported fewer changes to their business with less severe impact on their with the lone exception of travel related activities.
The change in the 10-year Treasury dropped to -0.80%, which is its lowest level since December 2016. And, the actual rate has fallen even farther, more than 100 basis points, in March 2020.
According to a survey conducted the week of March 2, 53% of discrete parts manufacturers have seen no change to their business because of COVID-19. A smaller percent, 39%, have made no adjustments to their business because of the virus.
Based on the January data, durable goods new orders looked to be near a bottom. However, the spread of COVID-19 means that the trends based on the latest data may not reflect the future moves in durable goods new orders.
The spread of COVID-19 across Asia and now more globally is having a significant impact on the world’s economy and the global supply chain. Manufacturers need to be using data to drive their decision making during this challenging period and avoid the temptation to make gut decisions.
In January, real consumer durable goods spending reached an all-time high. The month-over-month rate of growth for durable goods spending was 7.3%.
In January, real disposable income was $15,154 billion, which was an all-time high as is usually the case for real disposable income.
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