Economic Watch: New Manufacturing Orders Stagger, Construction Up

There is slight disagreement when it comes to the health of the nation's manufacturing industry in the wake of two reports issued on Thursday, but not when it comes to what pulled two gauges lower for August.

According to the monthly survey of purchasing managers by the Institute for Supply Management (ISM), economic activity in the sector contracted in August following five months of growth. Its Purchasing Managers Index (PMI) registered 49.4%, a decrease of 3.2 percentage points from the July reading of 52.6% with the latest performance coming in far worse than Wall Street expectations.

A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% is a sign it's generally contracting, according to the industry group.

Only six of the 18 manufacturing industries reported an increase in new orders in August, down from 12 in July, while only eight of the 18 reported an increase in August production, down from nine in July.

"The past relationship between the PMI and the overall economy indicates that the average PMI for January through August (50.9%) corresponds to a 2.4% increase in real gross domestic product (GDP) on an annualized basis,” said Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee. “In addition, if the PMI for August is annualized, it corresponds to a 2% increase in real GDP annually."

For comparison, the nation's GDP expanded at a revised annual rate of just 1.1% in the second quarter of the year.

According to the survey, the New Orders Index registered 49.1%, a decrease of 7.8 percentage points from the July reading of 56.9%. The Production Index registered 49.6%, 5.8 percentage points lower than the July reading of 55.4%. The Employment Index registered 48.3%, a decrease of 1.1 percentage points from the July reading of 49.4%.

The drop in new orders is the first ...Read the rest of this story

Driver Turnover at Truckload Fleets Plummets

Image: FMCSA

According to the American Trucking Associations, the driver churn rate at truckload fleets with annual revenues over $30 million dropped six points to 83% in Q2— reaching its lowest point since Q2 of 2011. And the rate for smaller truckload fleets fell nine points to 79%, marking its lowest level since Q3 of 2015. On the other hand, turnover at less-than-truckload carriers went up four points to 12%.

“The continued decline in the [truckload] turnover rate reflects the continued choppiness in the freight economy,” said ATA Chief Economist Bob Costello. “As we hopefully approach the end of this period of elevated inventories later this year, freight demand will pick back up, leading to increased demand for drivers and higher turnover rates in the future.”

Commenting on Aug. 23 on July's truck tonnage figures, Costello pointed out that the “prolonged softness is consistent with a supply chain that is clearing out elevated inventories. Looking ahead, expect a softer and uneven truck freight environment until the inventory correction is complete,” he said. “With moderate economic growth expected, truck freight will improve the further along the inventory cycle we progress.”

Regarding the latest turnover rates, Costello noted on Sept.1 that even as churn continues to fall at truckload carriers, “finding enough qualified drivers remains a concern for many carriers.”

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First Look at the Freightliner Cascadia Evolution

Freightliner Trucks revealed its long-awaited Cascadia Evolution on Aug. 31, 2016, in Colorado Springs, Colo. The official launch date is Sept. 1, but Freightliner threw back the curtain a few hours early with 12 trucks in fleet colors as a tribute to the largest customers in the Cascadia stable. Jim Park was there and has these photos.

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Sneak Peek at New Freightliner Cascadia

At the unveiling of the newest Cascadia. Photo: Jim Park.

As of this moment, we still don't know much about Freightliner's next-generation Cascadia model for 2017. The images and video were captured at Wednesday night's unveiling in Colorado Springs, Colo. The formal announcement comes later today with a press release from Daimler Trucks.

During the unveiling, Daimler Trucks North America President and CEO Martin Daum described some of the attributes that go into a good truck, and he spoke of the consultation and design phases of the project being a collaborative effort between the customer and the designers. He spoke of the thousands of Daimler employees involved in the project, and four years of work that has gone into the new truck.

He did leave the audience with this tantalizing bit. "It delivers fuel efficiency far beyond what we thought was possible."

We'll have more throughout the day as additional information emerges from Colorado Springs.

In the meantime, click here for a photo gallery from the sneak peak.

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Ford shows off new F-150 EcoBoost/10-speed combo

Ford Motor Co. rolled out its new second-generation 3.5-liter EcoBoost V6 gasoline engine and new 10-speed automatic transmission for test drives during a media event held this week at its 4,000-acre Michigan Proving Grounds about an hour north of Detroit.

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J. J. Keller whitepaper to help carriers prepare for Brake Safety Week

The Commercial Vehicle Safety Alliance (CVSA) will conduct its annual Brake Safety Week Sept. 11-17, 2016. In recognition of Brake Safety Week, J. J. Keller & Associates is offering a free whitepaper, The Importance of Brakes: Key Components, Inspection and Maintenance. The whitepaper explains how air brakes function and details the measures necessary to keep brake systems in good condition.

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Isotrak releases HOS app

Global telematics software solutions provider Isotrak said it has released “one of the first fully compliant applications that meets ELD certification and has been approved by the Federal Motor Carrier Safety Administration (FMCSA).”

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