November 2015 Economic Indicators
Melanie Garza - Director of Strategy & Growth
Construction Climbs to 7 Year High
Construction spending in the U.S. hit a 7 year high in September recording its highest level since March 2008. Strong performance was posted in both public and private sectors surpassing economist’s estimates.
In September, construction spending climbed 0.7% and is up 14.1% over September 2014. In 2015, spending has risen steadily. The figure shines a light on GDP as the economy is struggling with decreases in manufacturing and consumer spending.
Government spending rose 0.7% with education posting a 2.4% increase and highway construction up 0.3%
Private construction grew 0.6% with residential building showing a 1.9% gain including a 4.9% increase in multi-family structures. Non-residential construction fell slightly in nearly every category over with the exception of religious and transportation. However, many industries are up significantly from a year ago including: lodging at 33.4%; office at 20.8%; healthcare at 14%, transportation at 20.7% and manufacturing at 41.7%.
CEO Confidence Drops
Confidence among CEO’s fell sharply in the third quarter according to The Conference Board and PwC’s Measure of CEO Confidence™. CEO Confidence grew modestly in the first half of the year; and fell 10 points in the third quarter to 48. A Consumer Confidence also dropped 5 points in October.
CEOs’ assessment of current economic conditions was considerably less positive than in the second quarter. Of the CEO’s surveyed only 19% say conditions are better compared to six months ago, down from 46% last quarter. Assessments of conditions in their own industries were also less positive, with just 18% claiming conditions in their own industries have improved, compared with 49% in the previous quarter.
CEOs are less optimistic regarding the short-term outlook than earlier this year. Slightly over 22% of business leaders expect economic conditions will improve over the next six months, down from 38% last quarter. Expectations for their own industries were also more pessimistic, with less than 17% of CEOs anticipating an improvement versus 40% in the second quarter.
Lynn Franco, Director of Economic Indicators at The Conference Board said, “More than a quarter of chief executives report increasing their companies’ capital spending plans since January, while 20% say they have scaled back spending.”
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com.