Economy
Economic Data Released in May
Written by Sandy Williams
May 31, 2014
Economic indicators were mostly positive in May. Housing starts and sales improved while the ABI dropped. Respondents to the various economic surveys were generally upbeat about future economic and business conditions. Steel buyers looked for more of the same activity for the next six months. The abbreviated breakdown follows.
New home sales bounced back in April after declining for two straight months but are still described as mediocre by IHS analysts. Sales reached a SAAR of 433,000 in April, up 6.4 percent after plummeting 10 percent in March. Sales still are 4.2 percent below April 2013 estimates. Prices have been trending upwards but declined in April. Inventory was 192,000 units representing a supply of 5.3 months.
The Architecture Billings Index remained in contraction again in April, edging up slightly to 49.6 from 48.8 in March. New project inquiries picked up the pace to 59.1 from 57.9. AIA is optimistic that business conditions will improve as the year progresses.
Housing starts and housing permits soared in April. Housing starts increased 13.2 percent on a seasonally adjusted annual rate to 1,072,000 and were up 26.4 percent from April 2013. Multi-family starts leaped 39.6 percent, the fastest pace since 2007, while single family starts rose just 0.8 percent. Building permits were up 8 percent to a SAAR of 1,080,000 from March and 3.8 percent year over year, with multi-family authorizations surging 21.8 percent. Tight credit and economic uncertainty continues to sideline buyers says the NAHB.
Precision Metalforming Association (PMA) Business Condition Report in May indicated positive but mostly unchanged economic conditions and for the next three months. Incoming order levels are expected to stay the same. Shipping activity was perceived as higher on a year over year basis by 45 percent of participants.
Empire State Manufacturing Survey results were positive in May. The general business conditions index leapt 18 points to 19.0, up from a weak reading of 1.3 in April and the highest level in four years. New orders and shipments rose to 10.4 in May from negative readings in April. Future general business conditions were at the highest reading in 2 years with 53 percent of respondents expecting improving conditions.
The Philadelphia Fed Survey was positive for the third month running despite dropping slightly in May. The future general activity index increased 11 points while new orders and shipments picked up 7 and 6 points, respectively.
ISM Steel buyers in the April ISM Steel Buyers survey expect general economic activity to remain the same for the next six months. New orders are anticipated but current order levels are weaker than are buyers would like. Inventories are stabilizing after the winter drawdown and selling prices were viewed as competitive. More dependence on off shore is expected in the next six months but the spread between foreign and domestic is expected to narrow.
The JP Morgan Global PMI was a six month low in April at 51.9. The reading is still in the expansion range but reflected weaker production and new orders. US & UK production and output grew as did Eurozone output. Manufacturing declined in China, South Korea, Indonesia, Russia and Brazil. Japan’s new sales tax and subsequent downturn in production helped weaken the Global PMI.
Auto sales were mostly positive in April. Sales totaled 1.37 million units, up from 1.18 in April 2013. In the Detroit big three, Ford sales fell 1 percent while GM gained 7 percent y/y and Chrysler 14 percent. Volkswagen was down 8.4 percent for a total decline of 10.4 percent for the year so far.
Sandy Williams
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