At the Spend Matters Commodity/PROcurement Edge conference, which kicked off this morning, one of the expected highlights is a keynote from William Strauss, Senior Economist & Economic Advisor, Federal Reserve Bank, Chicago. Bill has spoken at a number of our previous events and is sharing his economic analysis of the current manufacturing and economy climate, as well as his outlook and forecast, which we don’t believe will be overly optimistic for 2014. However, before we cover Bill’s presentation, we thought we would share our own quick economic update and market analysis based on our own recent presentations.
Starting first with ISM’s numbers, the August ISM Manufacturing PMI 55.7 and the Non-Manufacturing (Services) PMI was 58.6 – both numbers represent the best showing of these indexes in the past 12 months, suggesting material growth of new orders, general buying activity, etc. However, the overall economic picture does not necessarily map to the actual PMI numbers. The consensus forecast for 2013 GDP growth is only 1.5% and unemployment is still lagging the significant uptake in procurement activity, coming in at 7.3% for August.
But the macroeconomic numbers only tell part of the story. Our monthly MetalMiner IndX report, based on collected data from aggregate price points, suggests continued volatility in the overall market. For example, our Copper MMI was up nearly 5% in September. While the MMI Rare Earth MMI held steady in September, it is still down approximately 20% on the year, and September numbers for individual rare earth metals fluctuated significantly. Moreover, while the services component of the US economy is looking healthier with certain bill rates up in the contingent area for skilled workers, uncertainty and risk remain, especially on a global basis for contingent and non-contingent services.
Stay tuned as our live coverage continues throughout the day from Commodity/PROcurement EDGE, including Bill Strauss’s economic outlook.