Economy

Key Economic Data

February 4, 2014

The Empire State Manufacturing Index rose 10 points to 12.5, indicating acceleration in business activity and reaching its highest level since May 2012. Prices paid and prices received rose in double digits in January with prices paid soaring 21 points to 36.6 indicating higher input costs. The six month outlook is optimistic with orders up and prices paid and received both falling slightly. Employment gains are expected along with increased capital expenditures and technology expenditures.

The January PMA Business Conditions Report indicated metalforming companies expect acceleration in business conditions within the next three months, including higher orders. Shipping levels were higher in January. William Gaskin, PMA president, expects shipment growth of 3 to 6 percent in 2014. Only 6 percent of companies reported workforce on short time or layoff, the lowest level since Dec. 2012.

The ISM Manufacturing Index released in January predicted flat or only slightly better conditions for the next six months. Off shore sources were looking more attractive to steel buyers as foreign mills offered prices well below domestic steel mills. Selling prices were viewed as competitive. No workforce layoff or short time was reported in December. Over 90 percent said investment in new facilities was in the cards for 2014.

The JPMorgan Global Manufacturing Index rose to 53.3 in December from 53.1 in November. Global production increased at the fastest pace since Feb. 2011 and exports were up for the sixth consecutive month. US, Japan, Germany, UK and Italy led output growth for the month. France continued to contract while Canada recorded a sharp slowdown. Manufacturing employment made modest increases in December for the majority of nations. Inflation was slightly above the survey average. Higher input costs were passed along in higher output prices.

The AIA Architecture Billings Index declined in December to 48.5 from 49.8 in November. The New Projects Inquiry rose to 59.2 from 57.8 the previous month. Regional averages: West 53.2, South 51.2, Midwest 47.0, and Northeast 42.8. Sector index breakdown: multi-family residential (53.8), mixed practice (51.0), commercial/industrial (47.1), and institutional (44.8)

New Residential Construction. Building permit authorizations dropped 3 percent from Nov. to Dec. to a seasonally adjusted annual rate (SAAR) of 986,000, but were up 4.6 percent from 2012. Housing starts were at a SAAR of 999,000—9.8 percent below November but 1.6 percent higher year-over-year. Housing completions were at a SAAR of 744,000, 10.8 percent below Nov. but 10.7 percent higher than Dec. 2012.

Existing home sales rose 1 percent to a SAAR of 4.87 million in Dec. Sales for 2013 totaled 5.09 million, an increase of 9.1 percent year-over-year and strongest since 2006. Median home price for the month jumped 9.9 percent year-over-year to $198,000. Inventory continued to decline, falling 9.3 percent in Dec. to 1.86 million homes for sale—a 4.6 month supply at the current sales rate.

The S&P/Case Shiller US National Home Price Index. The November 2013, 10-City and 20-City composites increased by 13.8 percent and 13.7 percent year-over-year, respectively. The month-to-month indices declined 1.0 percent in November, the first decrease since November 2012 but was likely due to seasonal weakening. Annual growth was reported in Boston, Chicago, Cleveland, Dallas, Las Vegas, Miami, New York, Tampa and Washington. Miami led the growth acceleration with an increase of 1.4 percent. The biggest decline was seen in Chicago which fell of 1.2 percent.

US auto sales were weaker than expected in December, up just 0.3 percent. Yearly sales for December, however, were up by 7.6 percent to a SAAR of 15.6 million units. GM surprised analysts with a drop of 6 percent while Ford and Chrysler reported 2 percent and 6 percent increases for the month, respectively. Toyota sales fell 1.7 percent for December.

Construction employment declined by 16,000 in December, according to data analyzed by the Associated General Contractors of America. The industry unemployment rate fell to 11.4 percent. Employment data was impacted by winter weather and underlying weakness in the construction sector said AGCA.