A series of positive reports indicate that manufacturing could play a key role as the U.S. and global economies continue to rebound. 2013 concluded with stronger-than-expected improvements in the U.S. gross domestic product, business spending, housing, and consumer confidence.
As noted by Richard Moody, chief economist at Regions Financial, “We’re not only hopeful but reasonably confident – as confident as one can be in the often humbling world of economic forecasting – that yes, 2014 will be the year when the U.S. economy finally shifts into a higher gear.”
Housing and Construction on the Rise
New home construction reached the third highest level in five-and-a-half years in December, according to the National Association of Realtors. The level fell just slightly from November, the best month in more than five years.
- “Much more construction is needed,” according to the NAR’s Housing Starts Data. Fifty percent more, to be exact. That’s the estimate by the NAR to help relieve current inventory shortages.
The Standard & Poors Case-Schiller Home Price Index is a leading measure of residential real estate prices, tracking changes in the value of properties nationally as well as in 20 metropolitan regions.
- Based on data through October, both the index’s 10-city and 20-city composites posted year-over-year gains of 13.6 percent.
- These were the highest increases since February 2006.
- October was the 17th consecutive month that both composites improved on an annual basis.
The U.S. Census Bureau provides monthly estimates of the total dollar value of construction work done in the nation.
- November construction spending was estimated at a seasonally adjusted annual rate of $934.1 billion. This was one percent above October and an impressive 5.9 percent above November 2012.
Consumers are More Confident
A stronger housing market reinforces broader economic growth as consumers feel more confident about spending. Based on data through mid-December, the Conference Board Consumer Confidence Index stood at 78.1, up from 72.0 the previous month.
- The percentage of consumers who expected business conditions to improve over the next six months rose from 16.7 to 17.2 percent.
- Those expecting conditions to worsen fell from 16.1 to 14.0 percent.
“Consumer confidence rebounded in December and is now close to pre-government shutdown levels,” said Lynn Franco, the board’s director of economic indicators. “Sentiment regarding current conditions increased to a five-and-half year high with consumers attributing the improvement to more favorable economic and labor market conditions.”
Manufacturing Hits New Heights
The Institute for Supply Management’s PMI (formerly known as Purchasing Managers Index) rose to 57 percent in December, the second highest level of the year and just slightly below November’s record 57.3 percent.
- Economic activity in the manufacturing sector expanded for the seventh straight month and the overall economy grew for the 55th straight month.
- New orders grew by 0.6 percent to 64.2 percent, the highest level since April 2010.
- The ISM employment index rose 0.4 percent to 56.9 percent, the highest level since June 2011.
As you plan your future in manufacturing, be sure to stay current with business, employment and hiring trends. Your staffing partner at Premium Staffing can help, whether you’re an employer looking to right size as conditions improve or a candidate seeking the best opportunities in 2014. Read our related posts and give us a call today.