September 2014 Economic Indicators
Melanie Garza - Director of Operations
Manufacturing Industry Posts Solid Growth
The manufacturing industry has hit its highest level of growth in 3 ½ years. The August PMI registered 59%, an increase of 1.9 percentage points from July’s reading of 57.1%. This marks the 15th consecutive month of expansion. Several indexes are reporting rapid growth, including New Orders – up 3.3% over July, which is its highest level since April 2004. Production also rose 3.3%, as well as imports and exports. There is good news for inventory levels and backlog of orders as they are also starting to climb.
Of the 18 manufacturing industries, 17 are reporting growth in August in the following order: Plastics & Rubber Products; Furniture & Related Products; Fabricated Metal Products; Apparel, Leather & Allied Products; Wood Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Paper Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Chemical Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Machinery; and Electrical Equipment, Appliances & Components. The only industry reporting contraction in August is Textile Mills.
Economy Recovers from First Quarter
The U.S. economy increased 4.2% in the second quarter following a poor first quarter that shrunk 2.1%, according to the U.S. Department of Commerce. The growth is attributed to several positive factors including: upturns in exports, private inventory investment, accelerations in PCE, nonresidential fixed investment and residential fixed investment. State and local government spending are also on the rise.
Business investments climbed significantly in the second quarter. Real nonresidential fixed investment jumped 8.4% compared with an increase of 1.6% in the first quarter. Investment in nonresidential structures spiked 9.4% compared with an increase of just 2.9% earlier this year. Equipment spending topped double digits at 10.7%, in contrast to a decrease of 1% in the first quarter.
Consumer spending also increased 2.5% over the last quarter, with durable goods climbing 14.3%. Services also climbed slightly at 0.8%. Exports and imports also rose 10.1% and 11%.
State and local government spending increased 2.9%, while federal government spending decreased 0.9%.
Questions? Please contact Melanie Garza at mgarza@teamCOACT.com