General

Manufacturing activity in New York state continued to decline in June. The headline general business activity index worsened from May, falling from -9.2 to -16.0. Meanwhile, the new orders and shipments indexes contracted after growing the previous month, with new orders decreasing from 7.0 to -14.2 and shipments declining from 3.5 to -7.2. Unfilled orders also declined 13.1 points to -8.3, while delivery times inched up from 1.0 to 1.8. Inventories fell from 4.8 to 0.9, but supply availability improved from -11.4 to -8.3.

The index for the number of employees rose into positive territory, improving from -5.1 to 4.7, while the average employee workweek improved but remained negative, rising from -3.4 to -1.5. Input prices ticked down 12.2 points to 46.8 after reaching the highest level in two years last month. Meanwhile, selling prices rose from 22.9 to 26.6 points, a reflection that prices paid increased at a slower pace while the pace of prices received quickened.

Looking forward, firms’ expectations vastly improved after a gloomy outlook in May and April. The index for future business activity turned positive, rising 23.2 points to 21.2. New orders are similarly expected to increase, with the forward-looking indicator rising from -2.7 to 26.1. Nevertheless, capital spending plans fell further into negative territory, dropping 0.6 points to -7.3. Employment expectations also ticked down from 11.6 to 10.4, while the average employee workweek outlook strengthened but remained negative, rising from -4.8 to -1.8. Input prices are expected to remain high but retracted slightly from 66.7 to 59.6. On the other hand, selling price expectations rose 6.1 points to 41.3. Meanwhile, supply availability is still forecasted to contract in the next six months but at a slower pace than predicted in May.

In June, Philadelphia’s regional manufacturing activity remained weak. At -4.0, the index for current general business activity stayed the same as May. Over 28% of firms reported decreased activity this month, while 24.5% saw increases in June, an improvement from the 19.0% reporting increases in May. The index for new orders declined but remained positive, slipping from 7.5 to 2.3. On the other hand, the shipments index jumped into positive territory, rising from
-13.0 to 8.3. Nevertheless, new orders and shipments both remain below their non-recession averages. Meanwhile, employment fell into negative territory, declining from 16.5 to -9.8, the lowest reading since May 2020.

The prices paid index dropped from 59.8 to 41.4, the lowest reading since February. The prices received index also fell, from 43.6 to 29.5. As has been the case for many months, the prices received index remains lower than the prices paid index, indicating manufacturers have been absorbing a portion of those higher costs paid.

Looking ahead, indicators showed expectations for future growth have dimmed from the previous month. After soaring more than 40 points in May, expectations for future general business activity plummeted nearly 29 points to 18.3 in June. A lower proportion of firms (45.1%) expect increases in activity, compared to last month’s reading of 67.3%, while 26.8% anticipate activity will decline. Similarly, the future new orders index declined from 49.7 to 22.1, and the future shipments index weakened from 51.1 to 27.9. The capital expenditures index declined from 27.0 to 14.5. The future prices paid and future prices received indexes both edged up from 61.6 to 68.9 and 50.0 to 52.5, respectively. Nonetheless, the index for future employment remained stable, ticking up from 23.0 to 24.6.

Industrial production slipped 0.2% in May. Meanwhile, manufacturing output ticked up 0.1%. Growth in motor vehicles and parts, apparel and leather and aerospace and miscellaneous transportation equipment more than offset declines in printing and support, nonmetallic mineral products and petroleum and coal products. At 103.6% of its 2017 average, total industrial production in May rose 0.6% from the same month last year. Capacity utilization slipped to 77.4%, down 0.3 percentage points from April, but up 1.4% over the past year. Capacity remains 2.2 percentage points below its long-term average from 1972 to 2024.

In May, major market groups had mixed growth. Among consumer goods, the production of durables increased 2.0%, with the greatest improvement in automotive products (3.9%), while the index for nondurables edged down 0.8%, with the greatest drop in energy goods (-3.2%). The business equipment index advanced 0.8% in May due to a 6.4% increase in transit equipment.

Durable goods manufacturing picked up 0.4% in May, led by growth in motor vehicles and parts (4.9%) that offset decreases in nonmetallic mineral products (-1.6%) and fabricated metal products (-1.2%). Meanwhile, nondurable goods manufacturing decreased 0.2% in May. Manufacturing capacity utilization stayed the same at 76.7%, remaining 1.5 percentage points below the long-term average.

From personal heroes to tax reform and tariffs, NAM President and CEO Jay Timmons covered it all in his recent appearance on iHeart Radio’s “CEOs You Should Know.”

From the beginning: In his June 9 interview with show host Mike Howard, Timmons told listeners about his journey from a childhood in the mill town of Chillicothe, Ohio, to his current role, running the largest manufacturing trade association in the U.S.

• As both the only child and the only grandchild in his family, Timmons was inspired professionally and personally by his parents and grandparents.
• Timmons’ grandfather “stood in line for six months during the Great Depression trying to get a job in manufacturing because he knew that that would be a way forward for his family,” he said.
• His mother climbed the ranks at the Chillicothe Gazette, eventually becoming president and CEO of the newspaper, and his father owned an appliance store, Timmons Appliance and TV.

Part of the Reagan Revolution: As an undergraduate student at Ohio State University, Timmons decided that college wasn’t for him—and he wanted “to do everything I could to help Ronald Reagan succeed.”

• So, he headed for Washington, D.C., where he ended up on Capitol Hill. His desire to enter politics “was really about [wanting to help shape] policy that enabled people to live their best lives.”
• Timmons ended up becoming the youngest chief of staff in the U.S.—to Virginia Gov. George Allen.

The road to manufacturing: Later, Timmons took over the policy and government relations team at the NAM, where he spent six years shaping the association’s agenda before being named CEO in 2011.

• “[M]anufacturing is not a partisan issue, and [neither is] the success of America,” Timmons continued. The industry “is really infused into the fabric of all we are as Americans. … [M]anufacturing helped us to build the infrastructure system that made us the strongest, most connected economy in the world in the 1950s and ’60s.”

Rocket fuel: From 2018 to 2022, manufacturing “had record investment, we had record hiring, and we had record wage growth over the course of the next three years—because of that rocket fuel, as President Trump called it,” the Tax Cuts and Jobs Act of 2017.

On tariffs: The manufacturing industry in the U.S. is hoping the administration and its trading partners will make trade deals during the current three-month pause on tariffs.

• “[M]anufacturers … are very hopeful that the administration really is going to be able to settle in their 90-day window all of these potential trade agreements throughout the world,” he said, adding that it would mean that “manufacturers actually can have the certainty they need to again invest higher and increase wages and benefits.”

While the labor market is holding steady, it’s not a good time to be looking for a job—particularly if you’re young (The Wall Street Journal, subscription).

What’s going on: “Recent college and high school graduates are facing an employment crisis. The overall national unemployment rate remains around 4%, but for new college graduates looking for work, it is much higher: 6.6% over the past 12 months ending in May.”

• That’s the highest level for this age group in a decade, not counting the COVID-19 unemployment increase.
• By contrast, jobseekers aged 35 to 44 with bachelor’s degrees had a 2.2% unemployment rate over the past year.

What’s different now: “Young graduates typically face a higher unemployment rate than their counterparts who have been in the workforce longer, but the gap is growing wider between older workers and the young.”

Why it’s happening: There’s a general slowdown in hiring right now.

• While it hasn’t had much of an effect on people who already have jobs (because layoffs have stayed low), it has hit those with the least experience.
• “With employers turning more cautious on hires, they are less inclined to gamble on workers with thinner résumés or skill sets.”

Worse for high school grads: “High school graduates ages 18 to 19 with no college [experience] averaged an unemployment rate of 14.5% over the past 12 months. That is up from 13.3% over the prior 12-month period.”

Manufacturing’s offer: With 381,000 job openings today, and as many as 3.8 million new employees needed by 2033, the manufacturing industry has many opportunities both for new college graduates and those without a college degree.

• The Manufacturing Institute, the NAM’s 501(c)3 workforce development and education affiliate, is creating solutions for employers seeking workers with much-needed skills and offers programs and resources for students, veterans and other job seekers looking to enter the industry. Learn more here.

Washington, D.C. – The Senate Finance Committee today unveiled its version of the One Big Beautiful Bill Act—preserving the core of the 2017 Tax Cuts and Jobs Act.

National Association of Manufacturers President and CEO Jay Timmons issued the following statement:

“Chairman Crapo and the Senate Finance Committee are delivering the kind of tax policy manufacturers have been calling for—policy that drives growth, unlocks investment and grows jobs. We commend Chairman Crapo for his leadership and steadfast commitment to pro-manufacturing tax policy. By preserving the full suite of pro-growth policies from the TCJA, this bill marks a major step forward for manufacturing in America.

“Manufacturers also want to ensure that the tax code continues to support inbound investment into the United States as well as preserve incentives that drive investments in the manufacturing and energy production needed to power America’s economic growth. If the Senate acts now, manufacturers can continue to grow—buying equipment, hiring workers, increasing pay and expanding operations with greater certainty and confidence.

“The Finance Committee recognizes what’s at stake: nearly 6 million jobs and more than a trillion dollars in economic output depend on getting this right.

“This is a once-in-a-generation opportunity to lock in a manufacturing resurgence in the U.S. Let’s finish the job—because when manufacturing wins, America wins.”

Background:

The Senate bill contains key NAM priorities, including:

• A permanent pass-through deduction and retention of pro-growth individual and corporate tax rates;
• Permanence for pro-growth tax policies like immediate R&D expensing, full expensing for capital equipment purchases and a pro-growth interest deductibility standard;
• An expanded and permanent estate tax exemption;
• Pro-manufacturing reforms to the international tax system that protect America’s competitiveness on the world stage; and
• A first-of-its-kind incentive allowing immediate expensing of the cost of new factories and modernizations.

Last week, the NAM released a report, “Keeping Our Promises: Manufacturers on Eight Years of Tax Reform,” featuring firsthand success stories from manufacturers on how the TCJA enabled them to invest in their facilities, their workers and their communities. Learn more about the NAM’s Manufacturing Wins campaign to protect 2017 tax reform here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.93 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

The NFIB Small Business Optimism Index rose three points in May to 98.8, remaining above the 51-year average of 98. May’s increase stemmed from a rise in expected business conditions and sales expectations. Of the 10 components included in the index, seven increased, two decreased and one stayed the same. Meanwhile, the Uncertainty Index climbed two points to 94 and remains far above the 51-year average (68) and the average since 2016 (80).

Taxes were ranked as small businesses’ top concern, with 18% reporting them as their most important problem, up two points from April. Labor quality ranked second as the top concern for many small business owners in May, with 16% reporting it as the most important problem. In May, 34% of small business owners reported jobs they could not fill, the same as April. The last time job openings were below 34% was January 2021. The challenge of filling open positions remains acute, particularly in manufacturing, transportation and construction. Inflation now ranks third with 14% reporting it as a top concern, and the last time it was below 14% was in September 2021.

A net 26% of small business owners reported raising compensation, down seven percentage points from April and the lowest reading since February 2021. Profitability remained under pressure, with a net negative 26% reporting positive profit trends, which is five points worse than in April. Of those reporting lower profits, 36% claimed weaker sales, while 13% cited increased material costs. A net 31% of small business owners planned price hikes in May, up three percentage points from April. Despite the economy showing signs of slowing, demand remains too strong to trigger widespread price reductions. Meanwhile, 4% reported their last loan was harder to get than previous attempts, down one point from April, but a net 7% of owners reported paying a higher rate on their most recent loan, up one point from the prior month.

The outlook for general business conditions rose 10 points to 25%. In spite of the increase in outlook, the share of firms saying it is a good time to expand was low, when looking at the history of the survey, despite rising one point to 10% in May. Businesses are still stumbling through mounting uncertainties, including the rocky tariff outlook and the future of tax policy, as they wait for Congress to renew tax reform.

The Producer Price Index for final demand (also known as wholesale prices) increased 0.1% over the month in May, after declining 0.2% in April. Over the year, producer prices moved up 2.6%. Meanwhile, prices for final demand excluding foods, energy and trade services edged up 0.1% over the month in May, after falling 0.1% in April. On the other hand, prices for these goods advanced 2.7% from May 2024.

In May, prices for final demand services inched up 0.1%, following a 0.4% decline in April, while prices for final demand goods rose 0.2%. The advance in final demand services is attributed to 0.4% growth in trade services, which measures margins received by wholesalers and retailers. Additionally, margins for machinery and vehicle wholesaling jumped 2.9%. Meanwhile, 80% of the increase in final demand goods arose from a 0.2% gain in final demand for goods less foods and energy. Within the index, prices for tobacco products climbed 0.9%.

Processed goods for intermediate demand rose 0.1% in May, following a 0.3% increase in April. The rise can be attributed to a 0.4% gain in the index for processed materials less foods and energy. Meanwhile, the index for processed energy goods fell 1.2%. Over the year, the index grew 1.9%, the largest 12-month increase since the 2.1% rise in February 2023.

Meanwhile, prices for unprocessed goods for intermediate demand fell 1.6% in May, marking the third decline in a row. More than 75% of the May decrease can be traced to a 3.5% drop in the prices for unprocessed energy materials. Additionally, prices for unprocessed nonfood materials less energy slipped 1.4%. Over the year, prices for unprocessed goods for intermediate demand declined 1.0%, the first 12-month decrease since dropping 2.2% in November 2024.

Consumer prices increased 0.1% over the month and 2.4% over the year in May, edging up from the 2.3% rise in April. Core CPI, which excludes more volatile energy and food prices, edged up 0.1% over the month and rose 2.8% over the year, the same as the 12-month increase in March and April.

Energy costs fell 1.0% over the month in May, driven by a 2.6% drop in gasoline, and declined 3.5% over the year. Meanwhile, fuel oil and electricity both rose 0.9% over the month, and utility (piped) gas prices climbed 15.3% over the year.

Food prices increased 0.3% over the month in May, with prices for food at home and food away from home rising at the same rate, and were up 2.9% over the year in May. The indexes for major grocery store food groups were mixed, with half increasing and the other half decreasing. Over the year, the index for food at home advanced 2.2%, driven by a 6.1% increase in the meats, poultry, fish and eggs index.

Shelter grew 0.3% over the month and 3.9% over the year, dipping slightly from the 4.0% 12-month increase in April. Meanwhile, prices for transportation services slipped 0.2% over the month but rose 2.8% over the year, with airline fares leading the monthly decline, falling 2.7% in April and 7.3% since April 2024. These decreases offset increases in motor vehicle insurance, which rose 0.7% over the month and 7.0% over the year.

Since May 2024, the over-the-year headline inflation rate has trended downward, but the risks and expectations of higher inflation have risen. Therefore, markets are anticipating that the Federal Open Market Committee will keep rates steady, as it did in May, at its meeting later this week. On the other hand, the expectation to cut rates later in the year are rising as inflation risks remain muted and weakness in the labor market have increased slightly.

With 2025 shaping up to be another challenging year for manufacturers, amid evolving workforce needs, rapid technological advancements and economic uncertainty, the Manufacturing Institute is offering much-needed help. The annual Workforce Summit put on by the NAM’s workforce development and education affiliate is a can’t-miss event where manufacturers can learn what works and how peers are addressing all these challenges.

What’s going on: This year’s summit, whose theme is “Manufacturing America’s Talent,” will be held Oct. 20–22 in Charlotte, North Carolina.

• Attendees will participate in sessions and interactive workshops that focus on topics like workforce preparation for AI deployment, expanding the military-to-manufacturing pipeline, closing the skills gap in hires with no factory experience, how to design optimal onboarding programs and much more.
• Sponsors include Dozuki, Grant Thornton, American Fidelity, TCP, Cornerstone OnDemand, MSSC and MyWorkChoice.

Why attend: At the Workforce Summit, manufacturers will be able to connect with subject-matter experts, community partners and education professionals to brainstorm and get answers about common challenges facing the sector.

• The vast majority—95%—of past attendees give the workshops four to five stars (out of five), according to the MI.

Who should attend: The Workforce Summit brings together the entire manufacturing talent chain and delivers fresh solutions for the industry’s most pressing workforce challenges. If you shape strategy, develop skills or build partnerships, this event is for you.

Register: Register for this year’s event here (but hurry—discounted early bird registration ends July 15). Contact [email protected] with any questions.

Read more: Read all about our two most recent Workforce Summits here and here.