Economy Watch: U.S. Construction Expands in November
- Jan 04, 2011
January 4, 2011
By Dees Stribling, Contributing Editor
In the construction industry these days, no bad news is something like good news, and the U.S. Department of Commerce reported that things didn’t get worse for construction in November. In fact, U.S. construction spending was up 0.4 percent in November compared with October, totaling $810.2 billion during the month. The November figure was down 6 percent compared with the same month in 2009, however.
Public construction projects led the way in November 2010, edging up 0.7 percent compared with the previous month. What’s being built? Schools, or at least spending on education facility construction projects was up by a full 1 percent month-over-month in November. By contrast, construction on highways was down by 1 percent in November.
Remarkably, private residential construction didn’t contract in November (unless it is revised away later). According to Commerce, residential construction expanded by 0.7 percent in November, while nonresidential private construction dipped a scant 0.1 percent month-over-month.
ISM Says Manufacturing Hitting All Cylinders
The Institute for Supply Management said — popular notions that nothing is Made in America anymore aside — that quite a lot is being manufactured here. More all the time: according to the ISM, economic activity in the U.S. manufacturing sector expanded for the 17th month in a row in December.
SMI’s manufacturing index (PMI) stood at 57 percent in December, up 0.4 percentage points from November, with the likes of new orders, production, employment, inventories and exports all growing. The only manufacturing industries reporting contraction in December were nonmetallic mineral products, paper products, printing, and miscellaneous manufacturing.
“The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (57.3 percent) corresponds to a 5.1 percent increase in real gross domestic product,” Norbert J. Ore, chair of the Institute for Supply Management, noted in a statement. “In addition, if the PMI for December (57 percent) is annualized, it corresponds to a 5 percent increase in real GDP annually.”
Wall Street decided that it was having a happy new year on Monday, apparently taking the construction and manufacturing numbers to heart. The Dow Jones Industrial Average spiked upward 93.24 points, or 0.81 percent, while the S&P 500 gained 1.13 percent and the Nasdaq advanced 1.46 percent.