US Census says manufacturing new orders declined 0.2% in August 2011. Econintersect analysis shows new orders grew 2.0% month-over-month and 2.5% inflation adjusted.
Further, Econintersect sees 15.4% year-over-year growth (8.9% inflation adjusted) – seemingly no marker for a new recession.
Manufacturing provides less than 10% of employment in the economy. Growth of manufacturing has remained in a tight channel for over one year.
The health of manufacturing is gauged by the growth of unfilled orders. This month our analysis shows this is the second time that inflation adjusted growth has been positive for two consecutive months since the official end of the 2007 recession. The previous occurrence was December 2010 and January 2011.
The inflation adjusted backlog growth is now showing that capacity is matching demand. However, this is a rear view look at the economy. Manufacturing generally correlates to the economy – but does not share turning points with recession calls. So in context to economy watchers – manufacturing by itself cannot be used as an economic gauge.