Dallas Fed manufacturing index -14.4 vs -11.3 prior

Comments in the report:

Food manufacturing

Will the consumer continue to spend enough to promote growth? This is the question I cannot answer confidently. As a food manufacturer, I need consumers to maintain their food/lifestyle choices to continue to grow. It has been a very slow start to the year.
Uncertainty about federal funding and donor/purchasing fatigue via private-label customers [are issues affecting our business].
We are working on several new growth opportunities that are promising for late 2024. We are leaning into data-driven processes and automation to improve the efficiency of this additional business. This includes AI [artificial intelligence] and API [application programming interface] programs.
Beef prices and availability are hurting margins and making it difficult to run product profitably. Chicken prices are also on the rise.

Printing and related support activities

We have been on a “hooray” roll regarding incoming orders, with a current huge uptick compared with the prior year to date. We are benefiting from a few diverse customer bases that need our services, plus we are coming up on our very busy time of the year, with growth forecast for that period as well. If not for these unique and somewhat isolated customer needs, I believe it would be very slow for us right now. Instead, we are adding workers in both the plant and office to handle the volume of work.

Nonmetallic mineral product manufacturing

The bad weather in January and February nationwide caused a downturn in new orders. This, coupled with the slight increase in interest rates (and no further decreases in mortgage rates), are not a good direction for homebuilding and remodeling and will cause us to miss our first-quarter expectation.

Primary metal manufacturing

Many good things may happen, but the actual occurrence remains to be seen.
Business is still lackluster overall, but the Commerce Department has announced preliminary countervailing duties on aluminum extrusions from Mexico, Tukey, China and Indonesia. Aluminum extrusion companies based in those countries were being subsidized by their respective governments to ship products into the U.S. In addition, dumping charges have been filed on these four countries plus 10 others, with the Commerce Department already ruling dumping has occurred. Duties on the dumping are expected to be announced in May 2024.
Capital expenditures are increasing to add new capabilities and new products. This is why our outlook is improved. Legacy business is declining sharply.

Fabricated metal product manufacturing

A business is only as good as its customers’ business and is completely dependent upon its customers’ demand—and demand is weak. It’s a far stronger, deeper recession than publicized. Whether a lack of customer economic confidence, post-COVID caution, interest rates, inflation or a combination of all, it has stopped demand beyond the essential spending of deferred maintenance and repairs that buyers cannot defer any longer. Even with “competition retraction,” businesses are serving the same and similar market segments, closing permanently or ceasing operations. Order volume remains unimproved.

Machinery manufacturing

We kept thinking orders would pick up in the first quarter, but they have not. In fact, they’ve gotten even fewer and farther apart. Is it election uncertainly, a lack of peace overseas, money still being too expensive, or is it just a wet blanket over the entire economy? We don’t know, but we’re anxious to get some momentum going into the second half of the year.
We are seeing general business activity slowing and competition increasing. We generally see this trend as business slows and our competitors become more hungry. However, we think that the third and fourth quarters will be better as the political landscape hopefully improves.
After a very slow start for the year, we are seeing a slight increase in business. Hopefully, this trend will continue.

Computer and electronic product manufacturing

Only time will tell the true underlying health of the labor market. While there are no disclosures we’re in a recession, ask any manufacturer on the globe and they will tell you we are deep into it. The backbone manufacturing of this country isn’t looking good at all. What is clear is that economic risks abound, and a soft landing is far from the truth out here. I have never seen it this bad in the capital equipment industry in the last 30 years.
We have seen a $400,000 decrease in sales this year. I am very concerned.

Transportation equipment manufacturing

Election, energy and interest rate uncertainty makes business planning difficult.

Miscellaneous manufacturing

Political discussions about taxes are extremely dishonest, and future proposed increases to taxes will further reduce U.S. manufacturing competitiveness globally. I find it very insulting and disingenuous when medium-sized companies are called out as not paying “our fair share” of taxes. Currently, if you look at our total tax paid versus our total profit, we are taxed at over 60 percent as a medium-sized manufacturing company. We can’t expand employment, technology and innovation to compete with China with higher taxes.
Our sales have been unusually low since October 2023, and we see the trend continuing but more dramatically in the next four months. We are laying off nonessential workers and cutting hours for employees, effective immediately. Our automotive OEM [original equipment manufacturer] business is down by about 20 percent. We are seeing a continued drop in our catalog sales. Our overall volumes have been gradually reducing for several years. We are unable to determine why this is occurring.

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