Manufacturing, Construction Solidly Close 2016
At the end of last year, much of public opinion looked unfavorably towards 2016 as one of the “worst year’s ever.” However, data shows that the economy, manufacturing, and construction entered 2017 on a high note, which will be a positive situation for Donald Trump’s administration to inherit on January 20. Not to mention, a labor market that is near full employment.
U.S. factory activity hit a two-year high in December, as rising raw materials prices and new orders surged. Additionally, U.S. construction spending reached a 10 and a half year high in November.
The Institute for Supply Management (ISM) marked its index of factory activity at 54.7 last month, which is a 1.5 percentage point increase and also the highest level since December 2014. Readings above 50 indicate expansion in a manufacturing, a sector that represents 12% of the nation’s economy.
Contributing to the sector’s success is rising oil prices, which hit an 18-month high this week.
RDQ Economics’ Chief Economist John Ryding said, “. . . in nominal dollar terms, nonresidential construction spending is within one percent of the October 2008 high, and this may be a further indication of the limited degree of slack in the construction sector that could be deployed on infrastructure projects.”
For comments, questions or concerns, please contact Daniella Soloway