The question of whether or not the economy is on the right track seems to depend on where you look.
An array of statistics were released earlier this week, and taken together they seem to suggest a still hesitant economy that nonetheless seems to be tipping slightly toward growth. For example, car dealers sold more than 1 million vehicles in October, marking a 7.5% gain from the same month a year prior, according to Autodata Corp. This type of growth in the auto sector translates to an annual sales rate of 13.3 million vehicles, which is one of the highest readings in years.
Elsewhere in the economy, the news wasn’t as uniformly positive. The Institute of Supply Management (ISM) released its most recent purchasing managers’ index (PMI), and although it continues to signal continued economic growth in the manufacturing sector, it still fell, from 51.6 to 50.8. Like NACM’s most recent Credit Managers’ Index (CMI), this indicates a slower pace of progress that continues to foreshadow tepid growth.
The best news from ISM’s October report was that the New Orders Index increased 2.8%, to 52.4% total, reversing the downward trend that gripped this index for the last three months.
Meanwhile, the U.S. Census Bureau of the Department of Commerce announced that construction spending during September 2011 was estimated at a seasonally adjusted annual rate of $787.2 billion, a 0.2% increase from the revised August 2011 estimate of $786.0 billion. Private construction drove the increase, as spending on government projects fell by 0.6% in the same month.
As heartening as the minor increase was, construction spending remains 1.3% below the September 2010 estimate of $797.3 billion.
Jacob Barron, CICP, NACM staff writer