Member Briefing June 19, 2023

Posted By: Harold King Daily Briefing,

Empire Manufacturing Survey – Modest Growth, Moderating Prices and Improved Optimism 

After falling sharply last month, manufacturing activity increased modestly in New York State, according to the June survey. The general business conditions index rose thirty-eight points to 6.6. Thirty-one percent of respondents reported that conditions had improved over the month, while twenty-four percent reported that conditions had worsened.

  • The new orders index climbed thirty-one points to 3.1, indicating that orders edged higher,
  • The shipments index shot up thirty-eight points to 22.0, pointing to a substantial increase in shipments.
  • The unfilled orders index remained negative at -8.0, a sign that unfilled orders continued to decline.
  • The inventories index also remained negative at -6.0, indicating that inventories moved lower.
  • At -3.6, the index for number of employees remained negative for a fifth consecutive month,
  • The prices paid index fell thirteen points to 22.0, and the prices received index fell fifteen points to 9.0.
  • The index for future business conditions increased nine points to 18.9.
  • The capital spending index increased only seven points to 8.0, suggesting that capital spending plans remained soft.

Read more at The NY Fed

War in Ukraine Headlines


J.P.Morgan Global Manufacturing PMI: Output Rises as Supply Chains Improve

Global factories raised production for the fourth successive month in May, as improving supply chains boosted output. There were more worrying signs on the demand front, however, as total new orders and international trade flows deteriorated further. The J.P.Morgan Global Manufacturing PMI™ – a composite index produced by J.P.Morgan and S&P Global in association with ISM and IFPSM – posted 49.6 in May, unchanged from April and March.

The headline PMI has remained below the neutral 50.0 mark in each of the past nine months. Growth of manufacturing production accelerated to an 11-month high in May, as a strengthening performance (on average) in Asia offset weaker expansion in North America and a further downturn in Europe. That said, the overall rate of increase remained relatively subdued. There was better news on the costs and supply chain fronts in May. Average purchase prices fell, albeit slightly, for the first time in three years. Average vendor lead times meanwhile shortened to the greatest extent since April 2009. Average selling prices also fell marginally for the first time since mid-2020.

Read more at J.P. Morgan Chase

Companies Resist Layoffs Even as Economic Weakness Looms

The hiring boom obscures what looks like a contradictory economic trend: Employees are working fewer hours. The average number of hours worked a week by private-sector employees declined to 34.3 in May, below the 2019 average and down from a peak of 35 hours in January 2021, according to the Labor Department. “In the past, reducing working hours has been a reliable harbinger of a wave of layoffs,” said Aichi Amemiya, senior U.S. economist at Nomura Securities.

During the pandemic, U.S. workers began spending fewer hours in their jobs, according to a paper by the economist Yongseok Shin and colleagues at Washington University in St. Louis. That trend has kept building even as the impact of Covid has faded. The average worker is now putting in fewer hours than at any point since 2014.  Survey data suggests this reflects a shift in priorities catalyzed by the pandemic. Workers before the pandemic likely worried about being passed over for promotions or a bonus if they worked less than their peers. “But with enough people choosing to work fewer hours at the same time, they don’t have to worry about losing standing in the economy,” said Shin.

Read more at The WSJ

COVID Update - FDA Recommends Updated Target for fall Covid Boosters

 The FDA on Friday selected a specific Covid strain to be used in the next booster that should be ready for the public sometime in September. The agency directed vaccine manufacturers that have authorized or approved Covid boosters to begin gearing up manufacturing of the selected strain, which accounts for about 40 percent of infections in the U.S. currently. The FDA also wants vaccine makers to continue testing the updated booster in trials to demonstrate that it will likely offer protection against severe disease and hospitalizations.

The manufacturers of the three Covid-19 vaccines available in the U.S. — Pfizer-BioNTech, Moderna and Novavax — have already begun preparing updated boosters that target the strain, called XBB.1.5. They’ll work on preparing their final submissions including updated safety data and data comparing immune responses from these boosters to previous Covid immunizations.

Read more at Politico


The Governor updated COVID data for the week ending June 16.


  • Weekly: 32
  • Total Reported to CDC: 79,730


  • Average Daily Patients in Hospital statewide: 517
  • Average Daily Patients in ICU Statewide: 50

7 Day Average Cases per 100K population

  • 2.1 positive cases per 100,00 population, Statewide
  • 2.6 positive cases per 100,00 population, Mid-Hudson

Useful Websites:

DiNapoli: Local Sales Tax Collections Up Slightly in May Driven By NYC

Local sales tax collections in New York state increased by 1.1% in May compared to the same month in 2022, according to an analysis released today by State Comptroller Thomas P. DiNapoli. This is the third consecutive month in 2023 of less than 2% growth. Overall, local collections totaled $1.71 billion in May, up $18.4 million compared to last year. For May 2023 compared with May 2022:

  • New York City’s collections totaled $744 million, an increase of 3.3%, or $23.5 million.
  • County and city collections in the rest of the state totaled $862 million, a decrease of 1.8%.
  • Most (47 out of 57) counties experienced some year-over-year decline.
  • Rockland County experienced the strongest growth at 7.2%.

Monthly sales tax collections are from the cash distributions made to counties and tax-imposing cities by the state Department of Taxation and Finance.

Read more at The Comptroller’s Website

'Progress' as Xi meets Blinken During Rare China Trip

China's Xi Jinping hailed "progress" in talks with U.S. Secretary of State Antony Blinken in Beijing on Monday, the final engagement of a rare trip aimed at ensuring disputes between the superpowers do not spiral into conflict. Blinken, the first holder of his post to meet the Chinese leader since 2018, had earlier strode towards Xi with his hand outstretched at the Great Hall of the People, a venue China often uses for greeting heads of state - positive signals in the choreography of diplomacy.

During the otherwise closed-door talks, Xi said China "hopes to see a sound and steady China-U.S. relationship" and believes that the two countries "can overcome various difficulties", according to a readout by China's state news agency Xinhua. It was not immediately clear from Xi's remarks or previous readouts of Blinken's earlier discussions with China's top diplomat Wang Yi on Monday and foreign minister Qin Gang on Sunday, exactly what progress had been made.

Read more at Reuters

China’s Small Businesses Are Hit Hard as Economic Recovery Falters

The country’s small and medium-size enterprises are crucial to the economy; they employed around 233 million people by the end of 2018, which was the last time this data was made public. But official data, recent disclosures from lenders and interviews with small-business owners show that many of these companies are suffering. “The biggest problem for small and micro enterprises now is survival,” said Ji Shaofeng, the founder of a micro loan trade association based in China’s eastern Jiangsu province.

The struggles of China’s small businesses make clear how far the country has to go before it fully recovers from a series of lockdowns, which were part of Beijing’s strict response to the coronavirus. A recent survey of manufacturing purchasing managers in China showed a second consecutive month of contraction for small companies. China’s small-enterprise purchasing managers index is now at 47.9; a reading below 50 shows business activity is slowing.

Learn more at The WSJ

European Central Bank Raises Rates, Lowers Growth Forecast

The European Central Bank nudged up interest rates by a quarter percentage point and indicated it will continue to push them higher, sending the euro surging on Thursday. The ECB’s assertiveness, which took markets aback, stands in contrast to the Federal Reserve’s decision on Wednesday to keep interest rates steady. At a news conference, ECB President Christine Lagarde said officials are unhappy with the outlook for inflation and will continue to raise rates unless economic data change substantially.

The European Central Bank on Thursday cut its growth forecast for this and next year, as inflation continued to weigh on the bloc. The economy is expected to expand by 0.9 percent in 2023, with growth accelerating to 1.5 percent in 2024 and 2025. The ECB had in March expected growth for 2023 to come in at 1 percent, before rising to 1.6 percent for both 2024 and 2025.

Learn more at Reuters

The New York Fed DSGE Model Forecast for June Sees Higher Growth

The Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model  projects output growth to be much higher throughout the forecast horizon than in March (1.0, 0.7, and 0.4 percent in 2023, 2024, and 2025 versus 0.2, 0.0, and 0.0 in March, respectively). The probability of a not-so-soft landing, defined as four-quarter GDP growth dipping below -1 percent, by the end of 2023 has declined to 26 percent from 41 percent in March and 70 percent last September.  This fairly dramatic change in the forecasts is mostly due to one new piece of information: SPF long-term inflation expectations have dropped by about 45 basis points in 2023

Inflation projections are a bit higher in 2023, due to the fact that inflation in Q1 has once more surprised to the upside relative to the SPF forecasts in February but is otherwise considerably lower than projected in March: 2.5 percent in 2024 and 2.2 percent in 2025 versus 3.0 and 2.9 in March. According to the new forecast, inflation returns close to the FOMC’s long-run goal by the end of 2025.

Read more at The New York Fed

West Coast Dockworkers and Ports Reach Contract Agreement

West Coast dockworkers reached a tentative labor deal with port employers Wednesday following more than a year of contentious negotiations that have disrupted trade flows from California to Washington state. The International Longshore and Warehouse Union, which represents more than 22,000 dockworkers, and the Pacific Maritime Association, representing employers at 29 ports, said the agreement would run for six years.

The tentative agreement must be ratified by rank-and-file workers and by the ocean shipping companies and terminal operators that make up the employers’ group, a process that could take several months. The two sides have most recently been battling over wages. Dockworkers wanted to double their pay over the course of the new contract, a demand that employers saw as unrealistic.   The agreement came after rising tensions over recent weeks led to job actions by dockworkers at various cargo terminals, raising concerns over potentially wider disruptions that would rattle the American economy.

Read more at The WSJ

With Massive Weapons Aid to Ukraine, Can US Rebuild its Stocks?

The U.S. has sent more than $45 billion in military aid to Ukraine, significantly drawing down its own stockpiles of key munitions and weapons systems. Among the items provided: more than 10,000 Javelin missiles, tens of thousands of 122 mm rockets, and more than 1.5 million 155 mm artillery rounds. Replenishing that materiel won’t be easy. The U.S. defense industrial base has evolved into a system based on producing just enough materiel to fulfill regular Pentagon orders. Expanding capacity could require big boosts in machinery, labor, and other manufacturing inputs.

In recent decades, advances in manufacturing equipment have allowed companies to shed waste and develop a system of just-in-time delivery – meaning they could produce just enough to fulfill orders. This manufacturing model is more efficient, but it’s also trimmed some of the slack, or surge capacity, from the former system. With only enough employees and equipment to meet the current supply needs, defense companies struggle to accelerate production when demand suddenly rises.

Read more at the Christian Science Monitor

The World Economic Forum Chose Michigan for its US Center for Advanced Manufacturing.

The fourth industrial revolution is reshaping the manufacturing industry, bringing new opportunities and challenges for businesses to navigate. But for Industry 4.0 technologies to be meaningful in manufacturing, businesses must work across the value chain to drive adoption and achieve faster, more sustainable change. The World Economic Forum is known for its thought leadership on Industry 4.0, bringing together business leaders, policymakers, subject matter experts and other stakeholders to discuss weighty issues. The organization recently selected Michigan for its first-ever US Center for Advanced Manufacturing.

The US Center seeks to accelerate the growth of cutting-edge technologies by creating communities of industry leaders, governments and academic institutions. As we’ve learned during the pandemic, managing a public health crisis requires working in a collaborative way across sectors. This cooperative model applies to innovation, too.

Read more at IndustryWeek

Honda Starts Commercialization for New Light Aircraft

Honda Aircraft Co. will commercialize its HondaJet 2600 Concept aircraft as a new entry in the growing private aviation industry, targeting 2028 for certification. The light jet was unveiled in 2021 and, according to the developer, has “garnered a positive market reaction.” Honda also indicated that it is finalizing engineering designs for the twin-engine concept aircraft, and it named a number of manufacturers who will supply the HondaJet 2600 program. Those include Williams International for FJ44-4C turbofan engines; Aernnova for aerostructures and other components; Spirit AeroSystems for the composite-material fuselage and composite-bonded frame; and Garmin for avionics systems.

The HondaJet 2600 concept aircraft is designed for high-speed, high-altitude, long-distance flights, reportedly capable of non-stop transcontinental routes with a maximum cruise speed of 450 knots (518 mph) and maximum ceiling of 47,000 feet. It will offer room for 11 occupants, in a “quiet and spacious cabin,” according to HondaJet.

Read more at American Machinist

ILO: Child Labor on Rise Following Decades of Progress

The International Labor Organization is calling for stepped up action to eliminate the use of children as workers, which is rising globally for the first time in 20 years. After three decades of progress toward the elimination of child labor, the ILO reports an increase between 2016 and 2020 of more than 8 million children working in hazardous conditions.

The latest figures show 160 million children, nearly 1 in 10 worldwide, are engaged in child labor. Half this number are working in the most hazardous forms of child labor, such as agriculture, construction, mining, and domestic labor. The ILO says the children are forced to work long hours for low pay under dangerous conditions that can pose a threat to their physical and mental health, even leading to death.

Read more at Voice of America

Waves of Machine Innovation Flood Factory Floors

The inspiring part of the past few years has been the innovative ways people have overcome adversity.  We are learning, across the industry, that, just because we declared the end of the pandemic, it doesn’t mean that everything is back to normal. We continue to experience long lead times, and those companies that stocked up on even the most basic items are able to keep near-normal delivery expectations, despite the challenges the rest of the industry is experiencing.

Many machine builders have taken this lull in the usually full-speed-ahead mentality to identify elements of automation that can enhance the user experience. I’ve previously noted the focus on software platforms and utilizing big-data development to provide corporations with better decision-making tools, but it is the end-user experience that is, from my point of view, seeing the best improvements as we pull ourselves out of the cloak of darkness over the past few years.

Read more at Control Design