How Supply Managers See High-Tech Business
Staff -- Purchasing, 6/21/2001
- Despite the economic gloom engendered by high gas prices, layoffs and other isolated data reports, U.S. consumers seem to be making no radical reductions in spending. One recent poll by Market News International finds auto dealers reporting "far stronger-than-expected" domestic vehicle sales in May "with many tracking a best to a near-best year." Meantime, a separate survey of real estate brokers finds home sales rebounding in recent weeks (despite "residual softness at the high end of the market") on a combination of low mortgage rates, recovering stocks and warming temperatures.
- The Conference Board's Consumer Confidence Index (1985=100) bounded up five points in May as the Expectations Index rose from 79.1 to 86.8. "Nowhere," says the Conference Board's consumer research director Lynn Franco, "are there indications that consumers will curtail their spending, which points to continued economic growth."
- As expected, Uncle revised its annualized economic growth estimate for first quarter 2001, down substantially from 2% (advance) to just 1.3% (preliminary). There is one more revision (final) scheduled for release later this month. Much of the downward revision reflects lower inventories, bumping up the odds for a production rally later this year. Revisions also reflect higher imports, a negative for net exports, and slower, but still positive, consumer spending growth.
- The hiring slowdown will persist nationwide through third quarter, according to a 16,000-company survey by Manpower Inc. The good news: Only 9% of firms anticipate staffing cuts versus 27% who will add staff in the coming three months, 59% who will hold staff levels steady, and 5% who are uncommitted either way. A year ago, 35% of firms expected to hire people while 55% were holding steady.
- U.S. durable goods orders plunged 5% in April, compared with a downwardly revised 2.2% gain in March. Orders for computers and electronics fell nearly 9%; the semiconductor subcategory shows a 32% decline. Meanwhile, the Federal Reserve's index tracking high-tech output (production of computers, semiconductors and communications equipment) fell 1% in April as firms in those industries continued to struggle with high inventories of both materials and finished goods.
| Indicator | Period | Latest Period | Previous Period | Year AGO | Annual % CHG* |
| Real GDP (B'96$,SAAR) | Q1 Preliminary | 9424.5 | 9393.7 | 9191.8 | 4.3 |
| Consumer spend, dur gds | Q1 Preliminary | 922.3 | 896.0 | 898.2 | 6.5 |
| Bus investment, equip | Q1 Preliminary | 1145.2 | 1152.7 | 1100.4 | 10.7 |
| PC board book-to-bill (ratio) | Apr | 0.63 | 0.70 | 1.22 | |
| Semi equip book-to-bill (ratio) | Apr | 0.42 | 0.59 | 1.36 | |
| High-tech IP** ('92=100) | Apr | 1314.0 | 1326.7 | 1097.8 | 45.8 |
| Emp cost index (6/'89=100) | Q1 | 152.3 | 150.6 | 146.4 | 4.2 |
| Dur gds orders ($B, SA) | Apr | 184.7 | 194.6 | 206.6 | 1.0 |
| Consumer conf ('85=100) | May | 115.5 | 109.2 | 144.7 | -7.9 |
| * Rate of change for year ending with latest period reported. ** Industrial production of computers + communication equipment + semiconductors. | |||||
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