Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Economic Watch: Manufacturing Solid, Construction Disappoints

U.S. manufacturing activity in July remained solid, according to two reports issued Tuesday while separate ones showed overall construction activity in the U.S. eased as consumer spending and personal incomes barely improved.

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
August 1, 2017
Economic Watch: Manufacturing Solid, Construction Disappoints

 

4 min to read


U.S. manufacturing activity in July remained solid, according to two reports issued on Aug. 1. Meanwhile, separate reports showed overall construction activity in the U.S. eased as consumer spending and personal incomes barely improved.

Ad Loading...

The Institute for Supply Management’s manufacturing index registered 56.3, down 1.5% from June but still well above a level the level of 50 that indicates expansion in this segment, which makes up about 12% of the U.S. economy.

Ad Loading...

This latest reading was just below a consensus estimate from analysts, but showed manufacturing is continuing to build on June’s gain with a return to expansion not seen since 2014, according to CNBC.

Comments from the survey of supply managers generally reflect expanding business conditions, with new orders, production, employment, backlog, and exports all growing in July compared to June, as well as supplier deliveries showing improving and inventories unchanged during the period.

Of the 18 manufacturing industries, 15 reported growth in July.

Meantime, a separate report on manufacturing showed a solid improvement in operating conditions while the upturn in business conditions was largely driven by marked and accelerated expansions in both output and new orders.

The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index registered 53.3 in July, up from 52 in June. Like the ISM report, a reading above 50 indicates expansion.

Ad Loading...

Production at U.S. manufacturers increased for the fourteenth month running in July while new orders received by US manufacturing firms grew at a solid pace, recovering from the nine-month low seen in June.

“The only real blot on the copybook was a decline in exports for the first time since last September,” said Chris Williamson, chief business economist at IHS Markit “However, although rising, the survey indices remain consistent with only very modest increases in comparable official data such as manufacturing output, durable goods orders and payroll numbers.”

He said the manufacturing sector remains stuck in a low gear, though is at least gaining momentum and will hopefully shift up a gear as we move through the second half of the year if demand continues to improve.

IHS Markit expects gross domestic product growth to accelerate to a near 3% annualized rate in the third quarter, fueled by gains in consumer spending and business investment, which should benefit manufacturing.

This follows a Commerce Department report from last Friday that showed the U.S. GDP increased at an annual rate of 2.6% in the second quarter of the year following a downwardly revised 1.2% pace in the first three months of 2017

Ad Loading...

These reports are in sharp contrast to a separate one from the Commerce Department on Tuesday that showed construction spending in the U.S. fell 1.3% in June from May’s revised level.

The performance was well short of a 0.4% increase forecast by a panel of economists and is the biggest decline since April.

Despite the month-over-month drop, the seasonally adjusted annual rate of $1,205.8 billion is 1.6% better than the level from June 2016. Also, in the first six months of 2017 the level is 4.8% higher than it was during the first half of 2016.

Lastly, another Commerce Department report released Tuesday showed personal income in June was relatively flat compared to the month before while consumer spending edged up just 0.1% following an upwardly revised 0.2% gain in May.

The so-called core personal consumption expenditures (PCE) price index increased 1.5% after advancing by the same margin in May. This is the Federal Reserve’s preferred measure of inflation, for which the central bank has set a target of 2%.

Ad Loading...

According to CNBC, data in the personal spending report was included in the second-quarter gross domestic product report published last week. It showed consumer spending increasing at a 2.8% annualized rate, which accounted for the bulk of the economy's 2.6% annual growth during the quarter.

U.S. consumers reduced spending at the end of the second quarter as income growth stagnated, according to chief economist at Stifel Fixed Income, Lindsey Piegza.

“As a consumer-based economy, the fastest way to arrest even today's modest pace of topline activity is to further restrain consumer activity,” she said. “As labor market conditions remain modest at best with still limited opportunities in terms of high-paying, full-time employment, shoppers will expectedly continue to tighten their purse strings, undermining the Fed’s expectations for a sizable ‘rebound’ in the near-term.”

More Fleet Management

ATA President Chris Spear.
Fleet Managementby Jack RobertsMarch 17, 2026

ATA’s Spear Warns Fuel Prices, Trade Policy, and Global Conflict Could Stall Trucking Recovery

Speaking at the TMC Annual Meeting in Nashville, ATA President Chris Spear said trucking faces mounting pressure from rising fuel prices, geopolitical instability, and uncertainty around trade policy.

Read More →
Illustration of author headshot with black-and-white old-fashioned rig in the background

New Entrants, Chameleon Carriers, and Safety: Is It Too Easy to Start a Trucking Company?

More than 100,000 new trucking companies enter the industry each year, but regulators manage to audit only a fraction of them. That churn creates opportunities for inexperienced startups — and for “chameleon carriers” that shut down after safety violations and reappear under new identities. Read more from Deborah Lockridge in this commentary.

Read More →
Panel discussion
Fleet Managementby Deborah LockridgeMarch 12, 2026

Fleet Managers Invited to Apply for Exclusive HDT Exchange Event

HDTX is an intimate event that connects heavy-duty trucking fleet managers with industry suppliers through small-group discussions, educational sessions, and structured one-on-one meetings.

Read More →
Ad Loading...
DAT iPhone Widget.
Fleet Managementby News/Media ReleaseMarch 12, 2026

DAT Launches iPhone Widget to Help Owner-Operators Find Loads Faster

New DAT One feature shows top-paying loads directly on an iPhone’s home screen, helping carriers react faster to spot-market opportunities.

Read More →
Optimal Dynamics Scale screen shot
Fleet Managementby News/Media ReleaseMarch 12, 2026

Optimal Dynamics Launches AI System to Help Carriers Choose Better Freight

Optimal Dynamics says its new Scale platform uses AI agents and optimization to help carriers find and secure freight that improves network balance and profitability.

Read More →
DAT March 2026 trucking conditions.
Fleet Managementby Jack RobertsMarch 12, 2026

DAT: Flatbed Demand Climbs as Van and Reefer Rates Soften

DAT Freight & Analytics data shows tightening flatbed capacity, easing produce markets, and softening van and reefer rates.

Read More →
Ad Loading...
YouTube thumbnail with Mike Roeth of NACFE saying "NACFE's Messy Middle: Which Fuel Wins?"
Fuel Smartsby Deborah LockridgeMarch 11, 2026

Run on Less “Messy Middle” Data Shows Multiple Paths Forward for Truck Powertrains [Watch]

NACFE's Run on Less - Messy Middle project demonstrates the power of data in helping to guide the future of alternative fuels and powertrains for heavy-duty trucks.

Read More →
Illustration of crowded New York street overlaid with dollar signs
Fleet Managementby Deborah LockridgeMarch 11, 2026

Federal Court Lets NYC Congestion Pricing Continue

A federal court ruling allows New York City’s congestion pricing program to continue, leaving truck tolls in place for fleets delivering into Manhattan.

Read More →
Fontaine Modification Access365
Fleet Managementby News/Media ReleaseMarch 10, 2026

Fontaine Modification Launches Real-Time Truck Modification Tracking Portal

Fontaine Modification has introduced a new customer portal designed to give fleets real-time visibility into the truck modification process, addressing one of the most common questions fleet managers face: “Where’s my truck?”

Read More →
Ad Loading...
FTR Tucking Conditions March 2026.
Fleet Managementby Jack RobertsMarch 10, 2026

FTR: Trucking Conditions Index Climbs to Highest Level Since 2022

Strong freight rates, rising volumes and tighter capacity push trucking conditions higher, though diesel prices could temper gains in the near term, FTR cautions.

Read More →