Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Last week’s slate of economic news was very light due to holiday bureau closures, but there were a couple key announcements that surfaced in the headlines: U.S. manufacturing was still growing, but hit a six-month low, and the pace of construction activity unexpectedly fell.
The pace of U.S. construction fell further than the market expected, but private construction, and especially residential construction showed improved performance. Construction spending during November dropping to an annual rate of $975 billion, which was 0.3 percent off from October’s revised estimate of $977.7 billion, the Census Bureau reported last week. The market had expected a 0.1 percent gain. That said, compared annually, November’s construction performance was 2.4 percent over November 2013’s estimate of $952.5 billion.
While construction on the whole was down, private construction spending fared positively. Private construction for November hit an annual rate of $697.7 billion, which was 0.3 percent over October’s revised estimate of $695.7 billion. Better yet, residential construction hit an annual rate of $352.7 billion in November, which was 0.9 percent better than October’s revised estimate of $349.6 billion.
The big drop was clearly in non-residential construction, and more specifically in public construction spending, which dropped to $277.3 billion, a whopping 1.7 percent below October’s revised estimate of $282.0 billion.
“November's drop in nonresidential construction spending ends four consecutive months of spending growth, but represents only a minor dip in the industry's momentum,” Associated Builders and Contractors Chief Economist Anirban Basu told Contractor Magazine. “… Conditions remain conducive to continued construction spending growth. Both the quantity and quality of job growth continues to improve, which will fuel the ongoing recovery in office-related spending.”
Manufacturing for December lagged behind expectations, with the Institute for Supply Management reporting last week that its index for factory production fell to 55.5 percent, a decrease of 3.2 percentage points from November’s reading of 58.7 percent. This marked a six-month low for the index, but it is important to note that while the index was down, any reading over 50 percent demonstrates growth in manufacturing.
Some other key manufacturing figures for December released by the ISM included the New Orders Index, which dropped 8.7 percentage points to 57.3 percent; the Production Index, which dipped 5.6 points to 58.8 percent; the Employment Index, which grew 1.9 points to 56.8 percent; and raw materials inventories, which dropped 6 points to 45.5 percent. What some analysts said these figures indicated was that manufacturing was waiting on prices to fall, so the drop could be momentary, and could point to pent up growth in the near future.
“Prices aren’t going to be falling forever, so at some point it’s going to make sense for these people to start buying again,” RBS Securities Inc. economist Guy Berger told Bloomberg. “If anything, it suggests we may be back-loading activity into 2015 that would have taken place in December, and that is actually good news.”
This week returns to a normal calendar of economic releases.
We can expect:
- Monday — Car and truck sales for December from the auto manufacturers.
- Tuesday — November factory orders from the Census Bureau.
- Wednesday — The November balance of trade from the Census Bureau of the Bureau of Economic Analysis.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; December consumer credit totals from the Federal Reserve.
- Friday — November wholesale inventories from the Census Bureau; December unemployment rate, payrolls, hourly earnings and average workweek from the Bureau of Labor Statistics.
Economic News in Review Greenville SC
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