The Dallas Fed manufacturing index unexpectedly jumped as
enthusiasm surrounding US President Donald Trump’s election appeared to carry over into the start of 2017.
The latest reading for the index rose to 24.5 for February, above economists’ expectations of a dip to 19.4.
The measure has held above zero for five straight months after not registering a reading in positive territory since December 2014 amid the oil-price crash.
Notably, in the recent survey several respodents pointed to US President Donald Trump’s economic proposals as a key factor in their more positive assessments.
“The basis of our more positive view of the business environment is the new administration’s commitment to regulation reform, lower taxes and repeal/replace the Affordable Care Act,” one respondent from the fabricated metal product manufacturing industry said. Meanwhile, a respondent in transportation equipment manufacturing added, “We aniticipate that the increasing confidence level will become real when some of President Trump’s pro-growth policies become a reality.”
Still, not everyone in Dallas shared in the opitimism regarding the new administration’s propositions.
A respondent in machinery manufacturing voiced concern over the possibility of changes to NAFTA or import duties, adding: “We have a portion of our manufacturing in Mexico, and some customers are asking for backup plans.” Moreover, another in computer and electronic product manufacturing said that the stronger US dollar, which has climbed in the months since the president’s election in November, is hurting American manufacters via a decrease in exports.
One particularly interesting comment on to the labour market came from a respondent in the fabricated metal product manufacturing sector. He told the Dallas Fed:
“The ability to find qualified labour for manufacturing jobs has become nearly impossible. Even with increases in starting wages (30% in the last two years) applicants are less qualified and less able to work a consistent 40-hour week. The labour force for manufacturing opportunities in my opinion has gone to near full employment.”