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Tag Archives: Manufacturing

Kicking the Can Down the Road

We got more signs that the economy is slowing down this week. And yet pundits and policymakers keep insisting everything is great.In his latest podcast, Peter Schiff says he thinks people like Donald Trump and Larry Kudlow know deep down that things aren’t that great, but they want to keep kicking the can down the road for political reasons.US manufacturing remained flat in March after two straight months of declines. It was the first quarterly drop in production since...

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Carmageddon at Tesla-Panasonic Gigafactory in Nevada and Shanghai

Expansion and investment plans frozen, after deliveries of Teslas plunged in Q1. The core of every Tesla is the battery, and the core of the battery is the battery cell technology, and that technology doesn’t belong to Tesla. It belongs to Panasonic, which makes the battery cells that Tesla packages into its battery packs. The Gigafactory in Nevada is a joint operation between Panasonic and Tesla. But now, according to the Nikkei, the partners have frozen the planned 50% expansion of...

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Next Phase in Trucking Boom-Bust Cycle Has Started

From “capacity panic” to “overcapacity” in less than a year? This is one of the most cyclical industries, with legendary boom-and-bust cycles: Orders for Class-8 trucks plunged 67% in March compared to March last year, to 15,200 orders, the lowest March for orders since 2010, according to FTR Transportation Intelligence. These are the heavy trucks that haul consumer goods, equipment, commodities, and supplies across the US. This plunge comes after orders had already plunged 58%...

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US Still Cleanest Dirty Shirt Among Manufacturing Giants, Germany Drops to Debt Crisis Levels, Japan Contracts, China Counts on Government Bailout of Private Sector

But the US shirt is getting dirtier. Germany’s manufacturing data “makes for uncomfortable reading.” Much of the glowing press coverage today was focused on the uptick in manufacturing data coming out of China, as reported by the Caixin Manufacturing PMI (Purchasing Managers Index) and the Official Manufacturing PMI, both of which returned to (feeble) growth mode, after having been in contraction mode since November. We will get to them in a moment. But what got less coverage were the...

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Worsening Inventory Pileup Rattles Goods-Based Economy

And how it compares to what happened during the Financial Crisis. The goods-based segment of the economy is heading for rough waters, and it is further diverging from the path of the services-based segment of the economy that is still growing at a solid rate: that’s what the current inventory pileup tells us. When inventories pile up, sales by those companies that supply that inventory do well. But companies that sit on that inventory and have trouble selling it will at some point cut...

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Phenomenal Trucking Boom Ends, Trucking Bust Starts

So that U-turn was fast, even for the legendarily cyclical trucking business. In January, orders for Class-8 trucks — the heavy trucks that haul trailers with goods of all kinds across the US — plunged by 58% from a year ago, to just 15,642 orders. It was the lowest number or orders since October 2016, toward the end of the “transportation recession” when Class-8 truck orders had plunged to the lowest levels since 2009, and truck and engine manufacturers responded with layoffs. The...

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New Trucks are Hot, Prices Surge. But Cars Face Carmageddon. And Total Sales Fall

Americans love paying big profit margins for big equipment, and automakers love them for it, but total sales are declining, and something doesn’t add up. The average transaction price of the vehicles sold by Fiat Chrysler jumped 5% in January compared to a year ago; for vehicles sold by Ford Motor Company, they rose 3.4%; for GM 2.4%; for Subaru 5.4%; for Toyota 3.0%. For the industry as a whole, the average transaction price in January, according to estimates by Kelley Blue Book,...

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We’re Flying with Eyes Partially Closed into Turbulent Markets & Economy

But for the markets: “No Data is Good Data” “NOTICE: Due to a lapse in federal funding this website is not being updated,” it says in big lettering against a bright red background at the top of the data sites of the Department of Commerce. This morning, the Commerce Department was supposed to release crucial data for the housing market: sales and inventories of new single-family houses (“new home sales”). This includes sales and inventory figures, how many months of supply there was,...

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Big Exporters are Losing It: US Manufacturing Gains. Germany, Japan, China not so Lucky

Central-Bank Stimulus Fail: The longer it drags on, the worse it gets? Manufacturing in the powerhouses Germany, Japan, and China took a hit – all of them complaining about exports. But US manufacturing continues to expand, according to a slew purchasing managers indices (PMI) released by IHS Markit. US Manufacturing Clings to Gains: In the US, “manufacturing remained a bright spot as production volumes expanded at the fastest pace for eight months,” IHS Markit reported today. Domestic...

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Trucking Boom Ends, Next Phase in Cycle Starts

This is a very cyclical business.  In December, orders for new Class-8 trucks — the heavy trucks that haul the products of the goods-based economy across the US — plunged by 43% from a year ago, to just 21,000 orders, the lowest since August 2017, and down by 60% from August 2018. The chart shows the percent change of Class-8 truck orders for each month compared to the same month a year earlier, which eliminates the effects of seasonality (data via transportation data provider FTR):...

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