Company Surveys | Company Survey Report
June 15, 2018
Oscar [email protected]
Charlene [email protected]
James [email protected]
Evercore ISI Company Surveys Tick Up
Company Survey Diffusion Ticks Up
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2012 2013 2014 2015 2016 2017 2018
Evercore ISI Company Surveys Diffusion Index 8 Wk. Avg. Jun 15 +1.6%
Current = +1.6%
Our Company Survey Diffusion Index (CSDI) was in an uptrend since hitting-2.4% on September 15 and reached +5.1% on February 9. Followingmoderation this Spring, we are at a reading of +1.6% this week.
Our Airline Survey tickedup for a second week onbetter domestic bookingsand close in pricing andrecovering fromweakness last month.
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2008 2010 2012 2014 2016 2018
Evercore ISI Airlines Sales Survey: Overall0=Weak 100=Strong Jun 12 53.8
Evercore ISI Airline Sales Survey: International0=Weak 100=Strong Jun 12 47.5
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Our Trucking Cos. Survey rose to 63.9 this week, the highest since 2005 on verystrong results from TL carriers. An improving economy has boosted demand forfreight while tight labor markets and regulatory change have limited supply.
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2015 2016 2017 2018
Trucking Spot Rate (Dry Van) Y/Y Jun 8 26.8%
Trucking Survey Shows Economy Improving
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Evercore ISI Trucking Cos Sales Survey2018:2Q 62.2e
U.S. Real GDP2018:1Q +2.9% (Right)
Tight capacity amidstrong demand hasled to boomingspot rates +27% y/ycurrently a risingcost for consumercos..
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Better Trucking Survey Suggests Fed Keeps Raising Rates
Our Trucking Cos. Survey has an 86% correlation with U.S. real GDP growthy/y % and currently suggests the economy is growing faster than 3.5%. Withthis in mind, the strength of the data suggests the Fed is likely to continue toboost the Fed Funds rate.
For those concerned about at what point the economy stalls, the TruckingSurvey has been an early indicator in the past.
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Evercore ISI Trucking Cos. Surveys4 Wk. Avg. Jun 12 63.4U.S. Fed Funds Rate
Jun 13 1.7% (Right)
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Pricing Power Gradually Rising
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2007 2009 2011 2013 2015 2017
Evercore ISI Pricing Power Surveys:Mfg., Retailers, Cons. Staples
0=Weak 100=Strong 4 Wk. Avg. Jun 15 40.2
This week, softer pricing in our Retailers and Consumer Staples Surveysbrought our Pricing Power index lower continuing a trend over the past twomonths. In recent quarters, the combination of our various pricing power timeseries shows improvement as companies have lean inventories and areworking to pass through higher input costs.
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Housing Remains Solid Supported By Income, But Concerns Over Rates Continue.
The moderation overthe last month hascome mostly fromprivate homebuildersas public buildersremain solid.
Demand for homes remains good as solid job growth and rising wagesencourage first time buyers. Inventories remain tight and pricing solid, thoughconcerns over rates are present.
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Evercore ISI Homebuilders Sales SurveyMay 62.0
U.S. Housing Market Index (NAHB)May 70.0
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Evercore ISI Homebuilders Sales Survey0=Weak, 100=Strong
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2006 2008 2010 2012 2014 2016 2018
Evercore ISI Retailers Sales Surveys0 = Weak 100 = Strong 4 Wk. Avg. Jun 15 52.6
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Retailers Sales Look GoodFollowing improvement into the holiday season, our Retailers Sales Surveyshows results have continued to be good across contacts. Employmentgrowth, improving wages, asset values, and the tax cut have all boostedspending.
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Evercore ISI Restaurants Sales Surveys0=Weak 100=Strong 4 Wk. Avg. Jun 15 65.4
Our Restaurant SalesSurvey shows betterresults led by QSR buthelped by othercategories as well.
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Cap Goods Strong, But Ticks Down. Business spending is good as companies are focused on productivityenhancing capex amid tight labor markets and competitive pricing.Construction and mining remain areas of strength, while transports are alsospending more amidst strong pricing. This week, our Cap Goods Cos. Surveypulled back from its highest level since 2006.
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1999 2002 2005 2008 2011 2014 2017
Evercore ISI Cap Goods Cos. Sales Survey0=Weak 100=Strong 4 Wk. Avg. Jun 15 67.9
Utilities cos. report stronger capex plans following steady moderation over thelast couple of years. Recent upticks have come from T&D which is strong andgeneration which is still soft. Environmental capex continues to slip.
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2008 2010 2012 2014 2016 2018
Evercore ISI Company Survey of China Sales Export Sales & Sales in China
4 Wk. Avg. Jun 15 53.1
Europe Survey Pulls Back
The Evercore ISICompany Survey ofChina Sales wasunchanged at 52.8,down from the highestlevel since 2011. Thepotential for trade issuesis a concern, butcompanies report littleimpact so far on demand.
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2014 2015 2016 2017 2018
Evercore ISI Company Survey of Europe SalesExport Sales & Sales in Europe
Jun 15 53.8
Following steady improvement in 2017 amid better than expected sales, ourEurope Sales Survey shows softness, slipping to 53.8 from a recent peak of 55.Breadth is also down in June. This survey captures sales in Europe and exportsto Europe for 28 U.S. based MNCs.
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Feb Mar Apr May mtd May 18 May 25 Jun 01 Jun 08 Jun 15 w/w ch y/y chKEY ECONOMIC SECTORS Retailers 53.6 53.4 52.6 52.8 54.2 53.9 50.9 51.2 54.0 54.4 0.4 8.0 Auto Dealers 52.8 52.8 55.1 54.4 54.3 54.6 53.3 55.7 54.2 54.4 0.2 4.8 Shopping Guide Cos. 53.8 53.9 53.6 53.8 53.5 53.9 53.8 53.6 53.4 53.5 0.1 0.4 Homebuilders 61.3 61.9 62.2 62.0 60.1 62.0 62.1 60.3 60.0 60.1 0.1 -4.9 Airlines 54.4 55.5 55.6 54.2 53.5 55.6 53.1 52.5 53.1 53.8 0.7 -1.5 Trucking Cos. 57.9 59.0 61.4 62.6 63.6 62.1 63.0 63.4 63.3 63.9 0.6 11.3 Credit Card Cos. 54.2 54.0 54.0 54.0 54.0 54.0 54.0 54.0 54.0 54.0 0.0 0.4 Bank Loans 45.9 45.9 45.7 45.9 46.0 45.9 45.9 45.9 46.3 45.7 -0.6 -1.2 Cap Goods Cos.* 64.7 66.3 67.9 68.0 67.8 67.9 - 68.0 - 67.5 -0.5 10.0 Mfg Cos.* 55.4 55.2 55.5 54.9 54.7 - 54.8 - 54.7 - - 2.1 Tech Cos.* 57.4 57.7 57.7 57.8 57.9 - 57.9 - 57.9 - - 5.4 Company Survey Average 55.4 55.8 56.2 56.1 56.1 56.4 55.6 55.7 56.1 56.2 0.1 3.6
Company Survey Diffusion 8 Wk.Avg. 2.0% 0.6% 0.4% 1.3% 1.6%KEY INDUSTRY SECTORS Restaurants 60.0 62.4 64.2 64.7 64.9 64.8 65.8 65.8 64.4 65.4 1.0 16.4 Wine & Spirits Wholesalers 66.0 66.1 65.9 66.0 65.8 66.0 66.0 66.0 66.0 65.5 -0.5 0.8 Temp Employment Cos. 52.5 53.3 53.7 57.1 57.4 56.9 57.6 58.0 57.5 57.3 -0.2 2.4 Permanent Placement Cos. 62.4 64.8 64.4 64.8 63.7 64.3 64.1 66.6 62.5 64.8 2.3 3.8 Auto Aftermarket Mfg Cos. * 48.9 48.7 49.2 49.7 49.5 49.7 - 49.7 - 49.2 -0.5 1.6 Chemical Cos.* 68.7 68.1 67.7 68.1 67.8 - 68.3 - 67.8 - - 3.1 Air Cargo Cos. 59.6 58.6 59.4 59.5 59.0 59.6 59.3 59.3 59.0 59.0 0.0 2.2 Limousine Cos. 59.3 59.0 63.2 64.1 62.0 64.1 64.1 63.0 61.3 62.7 1.4 1.6 Shipping Cos. 41.9 40.7 38.3 42.9 44.5 45.0 43.0 44.0 44.0 45.0 1.0 -3.6 Commercial Real Estate Cos.^ 59.8 59.8 58.0 58.0 - - - - 58.0 - - -3.1 Engineering & Const. Cos.* 60.7 60.4 61.3 61.5 61.6 61.6 - 61.6 - 61.6 0.0 2.7
SPECIALIZED CATEGORIES Front-End Surveys 55.9 56.3 56.7 56.8 56.9 57.2 56.1 56.3 56.7 57.0 0.3 5.5 Back-End Surveys 57.7 57.8 57.9 59.0 59.3 59.2 59.1 59.3 59.2 59.3 0.1 3.4 Consumer Staples Cos. 57.8 55.7 55.5 54.9 55.2 55.0 54.8 54.8 55.3 55.0 -0.3 -2.5 China Sales 52.2 52.5 52.7 53.3 52.8 53.3 53.3 53.3 52.8 52.8 0.0 3.8 Europe Sales 54.2 54.6 54.8 54.5 53.9 54.4 54.5 54.5 53.9 53.8 -0.1 6.7 Wine & Spirits Product Mix 59.7 59.8 60.0 60.2 60.0 60.2 60.2 60.2 60.2 59.8 -0.4 1.0 Apartment Cos. Traffic 56.4 55.2 55.3 55.7 55.9 55.4 55.9 56.1 55.9 55.8 -0.1 -2.3 Utilities Cos. Capex Plans ^ 51.8 51.8 51.4 52.1 52.1 - - - - 52.1 0.0 0.5
State Tax Survey ^ 53.1 49.8 59.6 59.8 - - - - 59.8 - - 20.7
PRICING POWER Retailers Pricing Power 31.9 31.4 31.7 31.2 31.4 30.4 31.7 31.7 31.7 31.0 -0.7 5.8 Consumer Staples Cos. Pricing Power 45.5 45.9 46.1 46.0 47.4 46.0 46.0 46.0 47.5 47.3 -0.2 1.3 Mfg Cos. Pricing Power* 42.5 43.3 43.5 42.8 42.2 - 42.5 - 42.2 - - 2.0 Temp Employment Wage Pressure 69.1 69.1 68.8 70.0 70.3 70.1 70.3 70.4 70.7 69.9 -0.8 3.9 Permanent Placement Wage Pressure 65.3 65.2 64.8 65.9 66.3 65.6 66.3 66.3 66.3 66.3 0.0 3.5 Auto Aftermarket Mfg Cos. Promotions* 38.4 40.9 42.9 42.9 43.5 42.6 - 43.2 - 43.7 0.5 -4.2 Apartment Cos. Rent 55.5 55.0 54.8 55.4 56.3 55.4 55.4 55.5 55.9 56.6 0.7 -0.3 House Price, Y/Y % 4.0% 4.0% 3.9% 3.9% 3.9% 3.9% 3.9% 3.9% 3.9% 3.9% 0.0% -0.2%
*bi-weekly survey ^monthly
Evercore ISI Company Surveys0=Weak 100=Strong
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DISCLOSURES
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