Retail Sales Decline

December 2, 2002

· The ISM Composite Index of manufacturing sector activity rose less than expected last month and remained below 50 for the third month. The rise to 49.2 was less than suggested by the Chicago purchasing managers report and other regional reports of November business activity.

· The production and inventory sub indexes rose, but new orders, employment and the supplier delivery indexes fell.

· The separate index of inflation pressure fell for the third month in four to the lowest level since March. The percentage (NSA) of companies reporting higher prices fell to 18%.

· Over the last ten years there has been a 57% correlation between the ISM Composite Index and the change in factory sector industrial production in the next month.

ISM Manufacturing Survey	Nov	Oct	Y/Y	2001	2000	1999
Composite Index	49.2	48.5	44.7	43.9	51.6	54.6
Prices Paid Index	55.7	58.3	32.0	43.0	64.8	54.2

Construction Spending Up

December 2, 2002

By Tom Moeller

· The value of construction put in place rose slightly more than expected in October due to higher nonresidential building. Figures for September and August were revised down.

· Residential building was unchanged. A huge 1.0% gain in one-unit structures, the second spurt in two months, offset a 3.0% drop in spending on multi unit structures.

· Nonresidential building activity rose for the first monthly gain since April. Spending here was still down 14.2% YTD. The gain was due to widespread increases amongst categories, but spending on industrial and office structures continued down.

· Public construction fell. Performance amongst categories was decidedly mixed

Construction Put-in-place	Oct	Sept	Y/Y	2001	2000	1999
Total	0.3%	0.3%	-0.2%	2.5%	7.3%	8.7%
Residential	0.0%	0.7%	5.1%	3.3%	7.4%	11.2%
Nonresidential	1.1%	-2.0%	-16.7%	-3.1%	7.1%	1.9%
Public	-0.3%	1.6%	6.4%	7.4%	5.4%	10.6%

Commentary Archive