Two key economic indicators, measuring manufacturing and construction spending, slowed in March and April.

The Institute for Supply Management, formerly known as the National Association of Purchasing Management, reported its index of manufacturing activity registered 53.9 in April, down from a revised 55.6 percent in March.
While a number above 50 indicates growth in the manufacturing sector, the rate of expansion is slower than the month before.
Norbert J. Ore, chairman of the Institute for Supply Management Manufacturing Business Survey Committee said, "Though the rate has slowed, a third consecutive month of growth in the manufacturing sector is certainly encouraging. The New Orders Index lost some momentum, but it is still strong enough to drive sector growth in the next several months.”
The April performance remained strong enough to be consistent with 4% or higher GDP growth in 2002, said Newport Communications Senior Economist Jim Haughey.
“Most of the decline was due to the orders index dropping from an extremely high 65.3 to 59.0," he said. "The two key sub-indexes for freight volume both rose slightly. Production was up to 58 from 57.8 and inventory purchases grew to 42.9 from 41.2,” he said.
ISM also reported new orders fell in April while production increased, but factories continued to shed jobs, continuing a more than 18-month trend.
Meantime, the U.S. Commerce Department reported construction spending fell 0.9% in March, due mainly to a large drop in public building which fell 5.6% while private building rose 0.7%
While the decline was the biggest since June 2001, here is no reason for concern, said Haughey.
“Public works is the most volatile sector of construction. Warm February weather clearly advanced some work scheduled for March ahead to February. And public construction typically lags at the onset of a business expansion. The declines in tax collections caused by the recession are finally restraining public spending,” he said.
Non-residential construction -- buildings such as factories, offices, and hotels and motels -- fell by 0.3% in March, down 19.5% from a year ago. Office construction is down more than 32% from a year ago.