Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Economic Watch: Manufacturing Remains Soft; Homes, LEI Slip

A preliminary report released Friday shows growth in the nation’s manufacturing sector is easing this month amid the slowest expansion of new orders so far this year, according the financial information services provider IHS Markit.

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
September 23, 2016
Economic Watch: Manufacturing Remains Soft; Homes, LEI Slip

 

5 min to read


A preliminary report released Friday shows growth in the nation’s manufacturing sector is easing this month amid the slowest expansion of new orders so far this year, according the financial information services provider IHS Markit.

The seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index for September is registering 51.4, down from 52 in August, pointing to the weakest improvement in overall business conditions since June. A reading above 50 indicates expansion while one below 50 signals contraction.

Ad Loading...

The full report, along with a similar and more closely watched one from the Institute of Supply Management, are both due out on Oct. 3.

Despite the September showing, the latest PMI reading marked seven years of continuous growth across the manufacturing sector. However, the headline index was below the average of 54 seen over this period and remains close to the post-Great Recession crisis low of 50.7 recorded in May.

Softer rates of output and new business growth were the main factors weighing on the headline PMI during September, according to the report. Also, the latest expansion of manufacturing production was the weakest for three months.

Ad Loading...

Survey respondents suggested that relatively subdued economic conditions had acted as a brake on new order volumes, while there were also reports that the strong dollar had dampened export sales. Reflecting this, latest data signaled that new work rose at the slowest pace since December 2015, while export orders dropped for the first time in four months.

“Softer new order gains are the main concern in the latest PMI survey, and this could act as a drag on production growth into the final quarter. Alongside reports of subdued domestic demand, a renewed dip in export sales also held back growth momentum in September,” says IHS Senior Economist Tim Moore.

He says despite the growth setback in September, manufacturers appear reasonably upbeat about their longer-term prospects.

“Job creation rebounded since August and input buying continued to expand at a notably faster pace than seen during the first half of the year,” Moore says. “At the same time, overall cost inflation remained marginal and this provided some headroom to stimulate client spending through price discounting.”

Leading Indictors Fall in August, Up Nearly 2% Over Past Year

This follows a report on Thursday by the private research group The Conference Board saying its Leading Economic Index for the U.S. declined 0.2% in August to 124.1 following a 0.5% increase in July, and a 0.2% increase in June. The index is used to forecast where the economy is headed in the next three to six months.

Ad Loading...

“While the U.S. LEI declined in August, its trend still points to moderate economic growth in the months ahead,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “Although strengths and weaknesses among the leading indicators are roughly balanced, positive contributions from the financial indicators were more than offset by weakening of nonfinancial indicators, such as leading indicators of labor markets, suggesting some risks to growth persist.”

Over the past six months the LEI has increased at an equivalent to an annual rate of 1.8%, which is about the same yearly pace of expansion in the nation’s gross domestic product.

The Conference Board Coincident Economic Index for the U.S., which measures current economic activity, increased 0.1% in August to 114.1 following a 0.3% increase in July and a 0.3% increase in June. The Lagging Economic Index for the U.S., a gauge of economic activity of previous months, increased 0.2% in August to 122.1 following a 0.2% increase in July and a 0.2% decline in June.

Existing Home Sales Fall For Second Straight Month, Overall Construction Jumps

Also on Thursday a report showed existing-home sales eased up in August for the second consecutive month despite mortgage rates near record lows as higher home prices and not enough inventory for sale kept some would-be buyers at bay, according to the National Association of Realtors.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 0.9% to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July.

Ad Loading...

After last month's decline, sales are at their second-lowest pace of 2016, but are 0.8% than a year ago.

According to Lawrence Yun, NAR chief economist, recent job growth is not yielding higher home sales.

"Healthy labor markets in most the country should be creating a sustained demand for home purchases," he said. "However, there's no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn't picking up to tame price growth and replace what's being quickly sold."

Single-family home sales, the biggest share of existing home sales by far, declined 2.3% to a seasonally adjusted annual rate of 4.70 million in August from 4.81 million in July, but are still 0.6% above the pace a year ago.

Meantime, a separate report on total U.S. construction activity for August shows a dramatic improvement from the month before with new construction starts soaring 21% to a seasonally adjusted annual rate of $711.2 billion, according to construction industry data provider Dodge Data & Analytics, following lackluster activity in July.

Ad Loading...

The August rise for total construction starts featured an especially elevated amount for nonresidential building while the non-building construction sector also experienced strong growth, including public works projects.

Through the first eight months of 2016, total construction starts on an unadjusted basis totals $439.3 billion, down 7% from a year ago. As 2016 is proceeding, the year-to-date decline for total construction is becoming smaller, affected to a lesser extent by the comparison to the massive projects reported during the first half of 2015 and now benefitting from the start of several massive projects in this year’s second half, according to the report.

“The sharp rise in August makes it likely when September data becomes available that construction starts for the third quarter will be able to register moderate growth, supporting the belief that the construction industry still has room for further expansion despite some recent deceleration” says Robert A. Murray, chief economist for Dodge Data & Analytics.

More Fleet Management

Illustration showing ladders against a blue background with Heavy Duty Trucking Emerging Leaders logo and the words "2026 nominations now open"
Fleet Management•by Staff•October 16, 2026

Nomination Deadline Extended for HDT Emerging Leaders

Just a few more days to nominate accomplished trucking fleet professionals under 40 who are making an impact and helping lead the industry forward for the HDT Emerging Leaders award. Deadline extended to October 20!

Read More →
Headshot of Mark Colson in front of a truck grille next to an American Trucking Associations logo
Fleet Management•by Deborah Lockridge•October 15, 2026

What Will ATA’s New Leader Bring to Trucking's Table?

Incoming President and CEO Mark Colson’s record in Alabama offers clues about his priorities and approach following Chris Spear’s abrupt departure as the head of the American Trucking Associations.

Read More →
Waabi-Volvo autonomous VNL truck.
Fleet Management•by News/Media Release•October 13, 2026

Volvo, Waabi Start Commercial Autonomous Operations in Texas

Volvo VNL Autonomous trucks, powered by the Waabi Driver, are hauling freight directly to third-party facilities for a customer in Texas.

Read More →
Ad Loading...
Illustration of silver robot waving his hand and a Samsara AI prompt on screen to call drivers
Fleet Management•by Staff•October 13, 2026

Samsara Launches Custom AI Agent Builder

Agent Studio lets fleets create AI tools for hours-of-service monitoring, reporting and driver support, including agents that communicate by phone.

Read More →
Overhead view of an Einride autonomous electric truck positioned between trailers at an EASE Logistics warehouse loading area in Marysville, Ohio.

Einride Driverless Electric Trucks Begin Daily Freight Operations in Ohio

Two cabless electric trucks are hauling freight between EASE Logistics facilities in Marysville, Ohio, as part of a multi-state truck automation project.

Read More →
Illustration of map with GPS markers overlaid with Geotab fleet card and a fuel pump nozzle
Fuel Smarts•by Staff•October 2, 2026

Geotab Links Fleet Card to Vehicle Data

The new card combines fuel discounts with telematics-based purchase controls. Geotab’s analysis also points to potential savings from choosing lower-priced fuel stops.

Read More →
Ad Loading...
Cyberstop column illustration showing multi factor authorization
Fleet Management•September 29, 2026

How MFA Helps Protect Trucking Fleets

Multi-factor authentication adds protection when passwords are stolen. Here’s how it works and where fleets should start.

Read More →
Three generic semi-trucks break through a fractured wall against a dark blue digital background, symbolizing trucking technology overcoming data silos.
Fleet Management•September 28, 2026

How Better Freight Data Helps Trucking Teams Get Ahead of Disruption

Trucking and logistics teams have plenty of data. The problem is getting the right information in front of the right people soon enough to act. Better-connected data can help teams spot trouble earlier and make smarter decisions before small problems become big ones.

Read More →
Photo of man in collared buttoned shirt speaking on stage in front of a backdrop that says Trimble
Fleet Management•by Deborah Lockridge•September 28, 2026

Trimble: Taking Artificial Intelligence in Trucking Beyond Faster Tasks

At Insight 2026, Trimble executives argued that fleets may need to redesign workflows to get more from AI as it introduced new products and enhancements. AI’s value will depend on how fleets combine automation with their people's knowledge.

Read More →
Ad Loading...
Geotab Whitepaper Data Tells the Story.  Why ELD Dash Cam belong together
Sponsored•September 28, 2026

Build a bulletproof fleet: Uniting ELDs and dash cams for total compliance

An ELD can prove compliance, but it cannot always prove what happened on the road. Discover how uniting accurate ELD data with AI-powered dash cam video can help your fleet strengthen compliance, defend against liability, protect drivers and reduce operational costs.

Read More →