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Bullish U.S. Construction and Factory Data
Looking back on 2017, there were some ups and some downs, but on the upside, U.S. factory activity and construction spending did better than expected to close our the year. With a surge in new orders growth in December and a bullish outlook in construction spending since its record high in November, economists predict the Fed will raise rates again in March.
The Institute for Supply Management (ISM) reported its index of national factory activity hit 59.7 last month, which is the second-highest reading in six years. Any reading above 50 signifies manufacturing growth, which makes up for about 12% of the country’s economy.
Another good indicator of a positive economic outlook is that factories reported paying more for raw materials, which implies that inflation will pick up in 2018.
Undoubtedly, the new tax plan will also benefit the manufacturing sector as corporate tax rates were slashed from 35% to 21%.
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