U.S. Manufacturing Sector Continues To Collapse
May 2, 2016 (EIRNS)—The U.S. manufacturing sector continues to plummet despite silly talk of "a rebound" from various monetarist quarters. Zero-Hedge reports that Markit, a service providing financial data, put the April Purchase Managers’ Index (PMI), considered to be a marker for the health of the manufacturing sector, at 50.8 for April. This is the lowest level since September of 2009, accompanied by a continued decline in new orders and a job-creation level that is now at a three-year low.
The Wall Street Journal reported April 27 that in February and March, the manufacturing industry lost 47,000 jobs, according to a Labor Department report. Gary, Indiana, known for its steel mills, had the highest unemployment rate of any of 38 metropolitan divisions (an area that counts as its own employment center), at 7.5%.
The Institute for Supply Management’s (ISM) manufacturing index was also 50.8 for April, instead of the hoped-for 51.4; but since it remains at slightly above 50, considered to be the dividing line between contraction and expansion, Bradley Holcomb, who oversees the ISM survey, told The Wall Street Journal, "the worst is behind us."
"There’s no end in sight to the current downturn in manufacturing activity," is Markit’s conclusion. The PMI survey suggests that manufacturing output is dropping at an annualized rate of 3% and "factory headcounts are being culled at a rate of about 10,000 a month," reports Zero-Hedge’s Tyler Durden.
"De-stocking is also very much in evidence; companies report weaker than expected demand, and exports are slumping at the fastest rate in one and a half years."
Moreover, "the data flow appears to be worsening in the second quarter."
Among the big names announcing factory closures and job elimination is Caterpillar Inc. In Fall 2015, the firm announced a downsizing plan, to close 20 factories, and eliminate 10,000 jobs over the next couple years. So far, over 5,000 jobs have been cancelled, and various plants cited for closure.
On April 27, Caterpillar announced six factories to shut. In Mississippi, its Oxford factory will be closed in 2017, which is a stamping plant for metal hose couplings. Already 100 workers were laid off, and the final 240 workers will go. Four more closures were announced, with varying times of completion: North Carolina (Morgantown, 110 workers, makes engines); Florida (Jacksonville, 70 workers, makes buckets and work tools); South Carolina (Newberry, 325 workers, packing for electric generators; and Ridgeway, 75 workers, works on generators).