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ISM's Holcomb: Manufacturers Won't Be Hurt By Rate Hike (Audio) · Bloomberg Intelligence

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  Speaker 1: dot com to learn more Bloomberg taking stock in fotus,
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  Speaker 1: the interest rates start to row. For where the economy
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  Speaker 1: is going, the question is how much higher should it be.
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  Speaker 1: FED has increased to fast, yes, and in doing so
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  Speaker 1: it has increased its liability. Keeping interest rates at neural
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  Speaker 1: for a long time is not going to cause inflation
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  Speaker 1: to go up. It's a very controversial. I think what
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  Speaker 1: impact on the world. The FED in Focus on Roombord
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  Speaker 1: Radio FED Reserve meets on June fifteen, well, it raised
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  Speaker 1: its key rate again for the first time since December.
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  Speaker 1: Manufacturing the health of factories in the United States will
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  Speaker 1: certainly be a factor to that point to Daily got
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  Speaker 1: News that manufacturing unexpectedly expanded at a faster pace in May,
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  Speaker 1: helped by other by an increase in orders. That signals
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  Speaker 1: factories rebounding from an early slump. Let's bring in now
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  Speaker 1: the man who puts together this survey for the Institute
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  Speaker 1: for Supply and Management, and that is Brad Holcomb. He's
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  Speaker 1: chairman of the Business Survey Committee. So Brad, the number
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  Speaker 1: looking better at fifte three, up from fifty point eight
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  Speaker 1: in April. Anything above fifty signals expansion. You gotta like
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  Speaker 1: at one three growing for three consecutive months after five
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  Speaker 1: months of contraction, so hopefully we're setting up a new
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  Speaker 1: positive trend. And as you mentioned, that's led by a
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  Speaker 1: good quality number in new orders fifty five point seven,
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  Speaker 1: down just a tenth of a point from a strong
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  Speaker 1: fifty five point eight last month, growing for five consecutive months,
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  Speaker 1: so good things for this month's report. The production UH
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  Speaker 1: series still positive at fifty two point six in me
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  Speaker 1: not quite as strong as April fifty four point two.
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  Speaker 1: So it's growing, but it's growing more slowly, growing more slowly,
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  Speaker 1: but growing five consecutive months, and production will vary according
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  Speaker 1: to employment levels, asset levels, shutdowns, etcetera. But it did
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  Speaker 1: eat into the backlog of orders as well as work
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  Speaker 1: off some new orders and jumping down to the backlog
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  Speaker 1: ads off off three and a half points to forty seven,
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  Speaker 1: contracting again normal very nations supplier deliveries. Explain to our
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  Speaker 1: listeners what that is and why it's so important that
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  Speaker 1: it jumped to fifty four point one in May from
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  Speaker 1: forty nine point one in April. Yes, so there's delving
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  Speaker 1: into because it's up five percentage points to fifty four
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  Speaker 1: point one, meaning that supplier deliveries are slower from suppliers
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  Speaker 1: to our factories, and that indicates a tightness in the
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  Speaker 1: supply chain and also lower supplies inventories, which we generally
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  Speaker 1: feel that its supplier deliveries above fifty we feel is
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  Speaker 1: a good thing in a growing environment because it represents
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  Speaker 1: the suppliers are having a bit of a hard time
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  Speaker 1: sort of catching up and keeping up. Now, your survey
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  Speaker 1: covers eighteen manufacturing industries, from wood products to fabricated metal
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  Speaker 1: to plastic and rubber in or twelve report of growth
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  Speaker 1: in MAZE. That means six did not. Which are the
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  Speaker 1: six ones that are lagging? Number one, the one that's
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  Speaker 1: lagging the most in our list is apparel, leather and
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  Speaker 1: allied products. And then comes to no surprise, petroleum and
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  Speaker 1: coal products. Transportation equipment is on that list. Let's remember
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  Speaker 1: that that contains autos, rail equipment, airplanes, etcetera. So while
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  Speaker 1: autos is doing well, transportation equipment overall is a bit soft.
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  Speaker 1: Non metallic mineral products, chemical products is one of the
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  Speaker 1: largest ones that that we followed death on the list,
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  Speaker 1: and then furniture and related products. Purchasing managers are the
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  Speaker 1: people who are surveyed for this report. How many companies
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  Speaker 1: at this point do you have in your universe three
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  Speaker 1: D and fifty scattered throughout our eighteen different industries cross
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  Speaker 1: the u s. What are some of the comments you've
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  Speaker 1: got that stood out to you, because you always includes
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  Speaker 1: some of the comments that people make in addition to
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  Speaker 1: just saying if things are growing faster, the same or slower.
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  Speaker 1: And that's what this is. It's a rather subjective survey
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  Speaker 1: of the purchasing managers who do have their finger on
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  Speaker 1: the pulse of their own companies right, and these comments
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  Speaker 1: give us insights more into the future time frame, whereas
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  Speaker 1: the numbers are specific to last month. Here's some of
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  Speaker 1: the comments from wood products market is improving steadily in
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  Speaker 1: both orders and pricing. From the machinery industry, steady to
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  Speaker 1: slightly up production rates versus prior months. On the negative side, however,
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  Speaker 1: slow down in Chinese economy is causing low orders. That's
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  Speaker 1: from the computer and electronic products industry. Brad, would it
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  Speaker 1: matter much to manufacturers if the FED raised the key
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  Speaker 1: rate next month? No, it wouldn't. We'd go right through it. Well,
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  Speaker 1: that's good, as we did, as we did. Okay, Well
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  Speaker 1: that's well then, FEDER reserve. I hope you're listening. I
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  Speaker 1: know the FED watches this report very closely. The Institute
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  Speaker 1: for Supply Management's monthly Survey of Manufacturing Activity. We want
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  Speaker 1: to thank Brad Holcum for joining us. Brad is the
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  Speaker 1: chairman of the Business Survey Committee at the i s M.
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  Speaker 1: Says it's a good report. Doesn't matter FED raises rates.
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  Speaker 1: Manufacturer is going to keep on moving ahead. Got a
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  Speaker 1: reserve in focus, continues up next professor who says the
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