Economic Watch: Manufacturing Continues Expansion, Construction and Consumer Confidence Jump
Economic activity in the nation’s manufacturing sector expanded in December for the seventh consecutive month, and the overall economy grew for the 55th consecutive month, according to a new report from the nation’s purchasing managers.
Evan Lockridge・Former Business Contributing Editor
January 2, 2014
2 min to read
Economic activity in the nation’s manufacturing sector expanded in December for the seventh consecutive month, and the overall economy grew for the 55th consecutive month, according to a new report from the nation’s purchasing managers.
The Institute of Supply Management’s index registered 57%, the second highest reading for 2013 and just 0.3% point below November's reading of 57.3 percent.
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A reading above 50% indicates expansion while one below the number shows contraction.
The New Orders Index increased in December by 0.6% point to 64.2%, which is its highest reading since April 2010 when it registered 65.1%. The Employment Index registered 56.9%, an increase of 0.4% point compared to November's reading of 56.5% December's employment reading is the highest since June 2011 when the Employment Index registered 59%.
“Comments from the panel generally reflect a solid final month of the year, capping off the second half of 2013, which was characterized by continuous growth and momentum in manufacturing,” says Bradley J. Holcomb, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee
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Of the 18 manufacturing industries, 13 reported growth in December.
A separate report from the U.S. Commerce Department show total construction spending in the country increased 1% in December to its highest level in since March 2009 and was the eighth straight month of continued expansion.
October’s figures was revised slightly upward from a first-reported 0.8% jump to a 0.9% hike
Residential construction rose 1.9% in November, after falling in October, its best performance since shortly before the 2008 financial crisis.
Spending on single-family homes in November increased 18.4% from the same time a year ago, while spending on apartment buildings moved 36.3% higher during the same period.
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These two reports follow one released just before the end of 2013 from a private research group, showing a big spike in consumer confidence.
The Conference Board’s Consumer Confidence Index, which had decreased in November, rebounded in December at 78.1, up from 72.0 in November. The Present Situation Index increased to 76.2 from 73.5. The Expectations Index increased to 79.4 from 71.1 last month.
“Consumer confidence rebounded in December and is now close to pre-government shutdown levels,” says Lynn Franco, director of economic indicators at The Conference Board. “Sentiment regarding current conditions increased to a 5 and a half-year high, with consumers attributing the improvement to more favorable economic and labor market conditions.”
She says looking ahead, consumers expressed a greater degree of confidence in future economic and job prospects, but were moderately more pessimistic about their earning prospects.
“Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began,” she says.
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