November 2016 Economic Indicators
Melanie Garza - Director of Strategy and Growth
GDP Posts Strong Q3
The economy appears to be picking up pace with the “advance” estimate of Real GDP climbing 2.9% following a gain of just 1.4% in the 2nd quarter, reported the US Department of Commerce. The index surpassed economist’s predictions of a 2.5% rise in GDP.
The increase in real GDP partly reflected an increase in consumer spending on services, notably on housing and utilities and on health care. Spending on durable goods, notably on motor vehicles and parts, also increased. Exports of goods increased, notably in foods, feeds, and beverages and in industrial supplies and materials. Exports of services also increased. In addition, private inventory investment increased, as did federal government spending and business investment.
Construction Spending Continues Drop
The Department of Commerce reported that construction spending continued to fall in September, down -0.4% from August. The figure is -0.2% below the same time in September 2015.
Total private non-residential construction fell -1% in September while residential construction grew 0.5%. Public construction also fell -0.9% in September with education spending dropping -1.1% and slight gain in highway investment up 0.9%.
The downturn is affecting most types of construction including: manufacturing at -1.5%, commercial at -2.9%, office at -0.7%, healthcare at -0.3% and transportation at -0.5%. Lodging construction posted a rise of 0.3% in September.
Capacity Utilization Falls
Capacity utilization for the industrial fell 0.4% in August to 75.5%. Industrial production decreased 0.4% in August after rising 0.6% percent in July. Total industrial production in August was 1.1% lower than one year ago.
The operating rate for nondurables fell 0.2% while the rates for durables and for other manufacturing (publishing and logging) dropped 0.5%.
Major industry groups capacity utilization current versus one year ago rates are as follows: Primary metals is currently 69.9% compared to 70.4% in Q4 15; fabricated metal at 78.7% versus 79.4%; machinery at 71.9% compared to 72%; electrical equipment is 82.7% compared to 84.8%; automotive is 84.1% versus 81% last year; aerospace remains at 81% over the last year.
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com