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Forestry-Related Industry Performance: June 2015

Forestry-related industry performance for the latter part of May and June was mixed over April data in both the manufacturing and non-manufacturing sectors.

Total industrial production (IP) decreased 0.2% (+0.2% expected) in May, the fourth decline in five months. At 105.1% of its 2007 average, total IP in May was 1.4% above its year-earlier level.

Manufacturing output also fell 0.2% (+2.1% YoY) in May (compounding April’s revision from -0.3% to -0.5%) and was little changed, on net, from its level in January. The fall-off in the mining index slowed to -0.3% after declining by an average of more than 1% during each of the previous four months; that moderation was due in part to a reduced pace of decline in oil and gas well drilling and servicing. Performance of major sub-groups included:

  • Wood Products fell 0.1% (+0.9% YoY)

  • Paper output fell 0.6% (-0.5% YoY)

Capacity at the all-industries and manufacturing levels moved higher: +0.1% (to 134.7% of 2007 output) and +0.1% (to 132.7%), respectively. Wood Products rose by 0.3% (+4.8% YoY) to 118.8%. Paper, on the other hand, contracted by 0.1% (-2.2% YoY) to another new low (98.4%).

Capacity utilization for the industrial sector decreased 0.3% in May, to 78.1%, or 2.0 percentage points below its long-run average. Wood Products and Paper CU both followed the larger trend by declining 0.4% (to 68.5%) and 0.5% (to 83.7%) respectively.

Manufacturing and Non-manufacturing Surveys

The Institute for Supply Management’s (ISM) monthly opinion survey showed that growth of economic activity in the U.S. manufacturing sector quickened slightly in June (Figure 2). The PMI rose by 0.7 percentage point to 53.5%. (50% is the breakpoint between contraction and expansion.) The most apparent changes included increases in employment and inventories, decreased order backlogs and moderation in the growth of imports (Table 3).

ISM_June

Wood Products expanded as increased new orders apparently overshadowed the contraction in backlogged and export orders. Paper Products was mixed, but managed to expand as well.

The pace of growth in the non-manufacturing sector also quickened marginally in June. The NMI edged up by 0.3 percentage point, to 56.0%. The sub-indexes that provide some forward-looking context were mixed. Two of the three service industries we track reported expansion, but there was little consistency among the sub-indexes.

Performance_June

 

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