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Economy in Brief

ISM Factory Index About Unchanged
by Tom Moeller May 3, 2004

The Purchasing Managers’ Composite Index (PMI) for April released by the Institute of Supply Management was little changed at 62.4 versus 62.5 in March. Consensus expectations were for 62.5.

During the last twenty years there has been a 71% correlation between the level of the Composite Index and the three month growth in factory sector industrial production. There has been a 56% correlation between the level of the Composite Index and quarterly growth in real GDP.

Patterns amongst the component series were mixed. Production jumped to 67.0 vs. 65.5 in March and from 48.8 a year ago while employment rose to 57.8, the highest level since December of 1987. These gains were offset by a lower orders index (65.0 vs. 65.7), a slightly quicker pace of vendor deliveries (67.1 vs. 67.9) and a lower inventory index which fell to the lowest level since October (44.8 vs.48.3).

The prices paid index strengthened further to 88.0, the highest level since July 1979.

ISM Manufacturing Survey April Mar April '03 2003 2002 2001
Composite Index 62.4 62.5 46.2 53.3 52.4 43.9
  New Orders Index 65.0 65.7 45.9 58.1 56.6 46.1
Prices Paid Index (NSA) 88.0 86.0 63.5 59.6 57.6 42.9
U.S. Construction Spending Jumped on Public Sector Surge
by Tom Moeller May 3, 2004

The total value of construction put in place jumped 1.5% in March following an upwardly revised 0.4% gain in February. A 0.5% rise had been the Consensus expectation.

A 5.2% jump in public construction led the March gain as spending on highways & streets (nearly one third of the value of public constructions spending) surged 9.8% (13.7% y/y).Transportation spending also surged 8.5% (6.0% y/y) and spending on power ballooned 15.6% (63.8% y/y).

Private residential building activity rose 0.7% following a modest decline in February as multi-family home building jumped 2.7% (8.2% y/y) and prior months' figures were revised up. New single family building rose 1.1% (19.9% y/y).

Nonresidential building fell 0.2% (-2.9% y/y) following a 1.4% gain in February.

These more detailed categories represent the Census Bureau’s reclassification of construction activity into end-use groups. Finer detail is available for many of the categories; for instance, commercial construction is shown for Automotive sales and parking facilities, drugstores, building supply stores, and both commercial warehouses and mini-storage facilities. Note that start dates vary for some seasonally adjusted line items in 2000 and 2002 and that constant-dollar data are no longer computed.

Construction Put-in-place Mar Feb Y/Y 2003 2002 2001
Total 1.5% 0.4% 7.9% 4.0% 1.1% 2.7%
Private 0.4% 0.4% 8.0% 4.6% -0.2% 1.4%
  Residential 0.7% -0.0% 13.4% 10.1% 8.6% 3.3%
  Nonresidential -0.2% 1.4% -2.9% -5.5% -13.0% -1.3%
Public 5.2% 0.4% 7.4% 2.1% 5.3% 7.4%
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