Factory Activity All-time High, Construction Spending Flat in the US

May recorded a 3 year high in factory activity in the US, while spending on construction exhibited a flat growth curve with in May. The Institute of Management Supply revealed that its national factory activity management escalated to 57.8 in May 2017 – the best ever in the past three years. The previous highest figure was noted as 54.9 in August 2014. It accounts for approximately 12% of the overall US economy. Construction spending, however, did not show much growth, though the Federal government reported the outlays on construction projects as highest in the last four years. The figures here remained pretty much mixed.

The escalated index of factory activity is an encouraging sign for the US economy. Sir Andrew Hunter, an economist at Capital Economics opines “The ISM index provides further evidence that the prospects for the manufacturing sector remain bright”. The economy has certainly rebounded beginning April and the second-quarter GDP is expected to reach 3.0 instead of the previously predicted 2.7%. On the other hand, the commerce Department reported that in the month of May, the construction spending has remained unchanged ($1.23 trillion) from the previous quarter. The spending went on a further decline of 0.7% after a previous decline of 1.4%. However, the outlays on local as well as state government spending on construction increased by 1.7% in the month of May, having seen a fall by 2.7% in April 2017.  2.1% rise in investment on public construction was also seen in the month on May as contrasted to a 2.7% fall in April.