December 2, 2013

ECONOMIC TRENDS MONTHLY

ISM for November 2013 and Construction Spending for October 2013
1. The numbers, part 1. The Institute for Supply Management (ISM) reported that its summary Purchasing Manages Index (PMI) rose 0.9 points for an November reading of 57.3. According to the ISM, a reading above 50 would typically be associated with an expansion of the manufacturing sector. November saw the sixth straight accelerated rise of the PMI. Furthermore, based on the ISMs estimates, if the current reading of 57.3 were sustained, it would tend to be consistent with 4.7% real GDP growth (annualized). 2. Wow! This is the highest reading since April 2011. There was lots of strength in new orders (63.6, up 3.0 points) and production (62.8, up 2.0 points). In the past, which may or may not prove to be prologue, when the PMI increased this much to this high of a level, it would not be surprising to see GDP growth go north or 4%. Regulatory headwinds persist, but Im thinking that some acceleration of economic growth over the next few quarters is a real good possibility. 3. Jobs and exports, too! Employment = 56.5, up 3.3 points. Exports = 59.5, up 2.5 points. This is looking like the "full package." About time! 4. Quite on the inflation front. There remains a positive tilt to prices (Prices = 52.5, down 3.) points). But this has as much rising slope as "the mountains of Florida." 5. Not just the U.S.! A number of other countries saw good PMI readings: Germany, 52.7, up from 51.7 in October; U.K., 58.4, up from 56.5; Switzerland, 56.5, up from 54.2; Norway, 54.5, up from 53.7; Germany, 56.0, up from 52.0; and China, 51.4, highest since April 2012. 6. The numbers, part 2. Construction spending for October rose 0.8% (y/y = +5.3%), but numbers for September were not previously released (due to the partial federal government shutdown. They dipped 0.3%. For what it is worth, Octobers total construction

Dr. Ken Mayland was previously the Chief Economist of First Pennsylvania Bank and KeyCorp. He graduated with degrees in economics from MIT and the University of Pennsylvania (M.A. and Ph.D.). Dr. Ken has been a past member of the economic Advisory Committee for the State of Ohio and has held several leadership positions with the National Association for Business Economics. For a complete bio, visit www.cvecon.com.

The MFG Meeting March 5-8, 2014 at the Arizona Biltmore Take Advantage of the Early-Bird Rates

spending now stands at the highest level since May 2009. Private residential construction spending backtracked 0.6% (y/y = +17.8%), but this followed a surge of 1.7% in September. Private nonresidential spending on structures dipped 0.5% (y/y = -3.4%), and this came after a 1.0% September pullback. Nonres construction spending on power and communications were particularly weak. Total public construction spending for October leapt 3.9% higher (y/y = +2.3%). September and October saw the first y/y increases in a couple of years. Curiously, the strength in public construction was virtually across the board.

Please contact me if you have any comments or questions. Cindy Minn Industry Statistics Manager
Precision Metalforming Association P: 216-901-8800 Ext. 2161 F: 216-901-9659

This ECONOMIC TRENDS MONTHLY report and any files transmitted with it is copyrighted and intended solely for the use of PMA members. Distribution and use of information to employees at recipient's facility is permitted and encouraged. However, the information is not to be distributed beyond your facility. You are receiving this e-mail because you are a PMA member. If you no longer wish to receive ECONOMIC TRENDS MONTHLY e-mails from PMA, e-mail Cindy Minn or call 216-901-8800 to be removed.

Copyright 2013 Precision Metalforming Association - All Rights Reserved Precision Metalforming Association, 6363 Oak Tree Blvd., Independence, Ohio 44131-2500 Phone: 216-901-8800 Fax: 216-901-9190