Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Economic Watch: Manufacturing, Construction Post Impressive Gains

In another sign the U.S. economy is gathering more steam, two reports released Thursday morning showed a strong rebound in the nation’s manufacturing sector while another indicated construction remains strong following earlier positive indicators.

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
December 1, 2016
Economic Watch: Manufacturing, Construction Post Impressive Gains

 

4 min to read


In another sign the U.S. economy is gathering more steam, two reports released Thursday morning showed a strong rebound in the nation’s manufacturing sector while another indicated construction remains strong following earlier positive indicators.

The survey of purchasing managers by the Institute for Supply Management showed economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 90th consecutive month, according to the industry group's Purchasing Managers’ Index.

Ad Loading...

The November PMI registered 53.2%, an increase of 1.3 percentage points from the October reading of 51.9%. A reading above 50% indicates expansion in the manufacturing sector while a reading below 50% indicates contraction.

This is not only the best reading in five months and the third straight monthly hike, but it also beat a consensus estimate from Wall Street analysts. Late last year and early into this year, manufacturing slumped to where the sector was contracting for the first time in the economic recovery since the Great Recession.

The New Orders Index for November registered 53%, an increase of 0.9 of a percentage point from the October reading of 52.1 while the Production Index registered 56%, 1.4 percentage points higher than the October reading of 54.6 percent. Of the 18 manufacturing industries, 11 reported growth in November.

Ad Loading...

"The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (51.2%) corresponds to a 2.5% 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 November (53.2%) is annualized, it corresponds to a 3.2% increase in real GDP annually."

Meantime, a similar report from financial information services provider IHS Markit showed manufacturing last month had the strongest growth rate for new orders since March 2015.

At 54.1 in November, the final Markit U.S. Manufacturing Purchasing Managers’ Index picked up from 53.4 in October and signaled the strongest improvement in business conditions for just over one year. The latest reading was up from the preliminary reading of 53.9 and the joint-highest seen since March 2015, indicating a robust improvement in manufacturing performance.

Like the ISM report, a reading above 50 indicates expansion in the manufacturing economy, though it’s not expressed as a percent.

A sharp and accelerated rise in new business volumes was reported by manufacturing companies during November, according to the IHS Markit report. This was mainly driven by domestic sales. New orders from abroad increased only marginally since the previous month, with survey respondents citing competitive pressures and the strong dollar. Anecdotal evidence suggested that improving U.S. economic conditions and greater confidence among clients had led to rising levels of new work.

Ad Loading...

“Both production and order books are growing at impressive rates, fueled predominantly by rising domestic demand for goods from both consumers and businesses. Companies are also rebuilding stock levels, suggesting the recent inventory drag is easing,” said Chris Williamson, chief business economist at IHS Markit “The stronger dollar is hurting exporters, but the flip-side of the exchange rate appreciation is lower import costs.”

Construction Spending Highest in Seven Months

Also released on Thursday was a report by the Commerce Department showing construction spending in the U.S. during October increased 0.5% above the upwardly revised September level and is 3.5% higher compared to October 2015. The performance was also the strongest since March.

September was originally reported as falling 0.4% while August was also revised to show a 0.5% increase rather than a 0.5% decline. Even with these revisions, October’s performance met a consensus estimate from analysts.

During the first 10 months of this year, construction spending amounted to $972.2 billion, 4.5% above the  $930.7 billion for the same period in 2015.

While overall spending on private construction fell 0.2% in October from the month before, residential construction increased 1.6% while nonresidential building fell 2.1%. In the public construction sector there was an overall rise of 2.8%, helped in part by a 1.9% increase in highway construction.

Ad Loading...

Other Reports also Positive

All of this follows the release of the so called “Beige Book” on Wednesday by the Federal Reserve, which looks at economic conditions in the central bank’s different districts. It characterized growth as “modest” or “moderate," marking little change from earlier reports.

Most analysts believe this report and other recent ones give members of the Federal Open Market Committee enough ammunition to push through an interest rate hike of .25% when they meet Dec.13 and 14.

Among other reports earlier this week, as well as before Thanksgiving, that indicated an improving economy was one from the Commerce Department showing personal spending posted its biggest gain in five months during October while personal incomes rose for the second straight month.

Meantime, a report from payroll processor ADP showed 216,000 private sector jobs were added in the U.S. during November while October’s level was revised down from 147,000 to 119,000. That report is ahead of federal job numbers set to be released Friday, including the nation’s unemployment rate.

Also, existing home sales in October hit their highest level since 2007, according to the National Association of Realtors, while orders for business equipment, an indictor of business investment, advanced in October for the fourth time in the last five months, according to the Commerce Department.

More Fleet Management

HDT Cyber Stop graphic pairing a laptop displaying binary code with a person using a clipboard to inspect a truck chassis, against a background of padlock icons.
Fleet Management•November 2, 2026

Give Your Trucking Fleet a Cybersecurity Walkaround

Your fleet's cybersecurity policies may look good on paper. These seven checks can help you find out whether they’re working.

Read More →
Red Kodiak-branded autonomous tractor with Charger-branded trailer backed up to warehouse
Fleet Management•October 30, 2026

Kodiak Lines Up Fleets for Driverless Trucking

An agreement for 75 trucks, a new Texas freight lane, and progress on safety validation move Kodiak closer to its planned driverless highway launch.

Read More →
Illustration with Star of David and EEOC logo
Fleet Management•by News/Media Release•October 28, 2026

ITS Logistics Settles Religious Harassment Case

The Nevada-based logistics firm agreed to pay more than $396,000 to settle a religious harassment charge involving an employee's Jewish identity.

Read More →
Ad Loading...
Truck on divided interstate highway driving toward sunrise
Fleet Management•October 27, 2026

Your Trucks Are Busy. That Doesn’t Mean They’re Winning.

High utilization doesn’t always mean strong margins. Looking beyond the current load can help fleets make better dispatch decisions and get more value from each truck’s time.

Read More →
ATA economist Bob Costello speaking beside a graph showing truckload operating costs rising as freight revenue per mile declined after 2022.
Fleet Management•by Deborah Lockridge•October 22, 2026

Why This Trucking Recovery Is Different

Freight demand remains sluggish, but rising costs and tougher enforcement have taken enough capacity out of the market to change the outlook for motor carriers.

Read More →
PS Coach tablet interface showing a driver’s coaching inbox, safety event video and coaching advice for a harsh-braking event.
Fleet Management•by News/Media Release•October 21, 2026

Platform Science Adds Dispatch and Safety Tools

Four additions to PS Fleet help fleets monitor loads, manage driver coaching, share truck locations and adjust video system settings.

Read More →
Ad Loading...
Screen capture showing PrePass Intelligence data on tolls
Fleet Management•by News/Media Release•October 21, 2026

PrePass Intelligence Mines Fleet Bypass, Toll and Safety Data

PrePass Intelligence helps fleets measure bypass savings, flag potential toll overcharges, and spot suspicious transactions by combining data from separate systems.

Read More →
Computer screen showing examples of what fleets could ask Motive AI Agents to do
Fleet Management•by Staff•October 20, 2026

Motive Adds AI Agents for Fleet Operations

New tools automate follow-up on fleet data, from maintenance work orders to driver alerts, with two-way voice conversations planned for later this year.

Read More →
Graphic art with a heavy-duty tractor trailer and a work truck with the words "trivia lunch"
Fleet Management•by Lauren Fletcher•October 19, 2026

Can You Beat Our Trucking Trivia Challenge?

Test your truck knowledge with 19 trivia questions from Heavy Duty Trucking Exchange. Can you keep up with the fleet pros?

Read More →
Ad Loading...
Four horizontal and two vertical video screens show different aspects of BeyondTruck's new compatibility engine
Fleet Management•by Deborah Lockridge•October 19, 2026

BeyondTrucks Adds Rules Checks to Dispatch

New Compatibility Engine checks driver qualifications, equipment requirements and fleet policies before loads are dispatched.

Read More →