Monday, January 25, 2010

Is the Impact of the Recession on the Construction Industry Finally Over?

Everyone knows the impact recession on the construction industry has been. It has been hurt badly by the worst recession since the 1930's. The housing and construction industry had made for many businesses and individuals to boom, then bust.

We're not saying that the construction industry is ready to "boom" again, but according to the Trailerbody, we may have seen the worst.

"Construction equipment manufacturers expect overall industry business to turn around slightly in 2010 following double-digit expected year-end 2009 declines in the minus-40-percent range for the United States and minus-30-percent range for Canada and other worldwide sectors, according to the annual "outlook" survey of the Association of Equipment Manufacturers (AEM).
Survey respondents anticipate stronger growth going into 2011, but not enough to erase the severe 2009 business and job losses. Business in 2012 is then expected to level off.

"Even with a modest rebound in the next few years, the construction equipment industry will still be down by double digits, and there will still be double-digit industry unemployment," stated AEM President Dennis Slater. "This is not surprising given the continued instability of the housing market and no long-term commitment to America's roads, rail, airports, water distribution and ports to move people and goods efficiently and safely, and to compete effectively in the global marketplace."

Construction machinery business in the United States was predicted to end 2009 with a 43-percent overall drop and then increase 5% in 2010, followed by gains of 15% in 2011 and 14% in 2012.

For Canada, 2009 business was anticipated to decrease 34-percent overall with a 2010 increase of 7%, a 14% increase in 2011 and 11% increase in 2012. Industry business to the rest of the world was expected to close out 2009 with losses of 34%, followed by a 2010 gain of 7% and growth of 13% in 2011 and again in 2012. "

For the full article and a link to Trailer Body, click here.

Monday, January 4, 2010

Manufacturing Index Rises to Near 4 Year High

This is a great way to start out the new year - with GREAT Economic News!!

The story below is from MarketWatch, a great source of information concerning the health of our economy.

WASHINGTON (MarketWatch) -- The U.S. manufacturing sector expanded in December for the fifth straight month, the Institute for Supply Management reported Monday, further evidence that the recession is receding.

The ISM manufacturing index rose to 55.9% from 53.6% in November. It was the highest since April 2006.

Economists surveyed by MarketWatch were expecting a modest gain to 54.2%.

See our complete economic calendar and consensus forecast.

Readings over 50% indicate that more manufacturing firms said business was improving than said it was worsening.

"Overall, this was a very strong report, and it suggests that the recovery in the U.S. manufacturing sector is gaining further traction," wrote Millan Mulraine, an economist for TD Securities. "Given the fairly good historical performance of this indicator in tracking U.S. economic activity, the big improvement in the headline index is pointing to further pick-up in U.S. GDP."

In December, nine of 18 industrial sectors were growing, led by apparel, petroleum, electronics and machinery. ISM said. Manufacturing is benefiting from the need to restock inventories, said Norbert Ore, chairman of the ISM's survey committee. Read the full report.

"Overall, the recovery in manufacturing is continuing, but there are still some industries mired in the downturn as evidenced by the seven industries still in decline," Ore said. Construction materials, chemicals and plastics are declining.

"In spite of the solid performance in the ISM data this month, we believe the mixed signals emanating from the entire manufacturing sector suggests that the sector is vulnerable to a sharp slowdown in the first half of 2010," wrote Ken Kim, an economist for Stone & McCarthy Research.

The new orders index rose to 65.5% in December from 60.3% in November. It was the highest since December 2004.

The employment index rose to 52% from 50.8% in November. The production index rose to 61.8% from 59.9% in November. The supplier delivery index rose to 56.6% from 55.7%.

The prices paid index rose to 61.5% from 55% on higher prices for metals such as steel, aluminum and copper.

In a separate report, the Commerce Department said construction outlays fell 0.6% in November after a downwardly revised 0.5% decline in October. It was the seventh straight decline in construction spending. See full story.

Story written by Rex Nutting of MarketWatch

Click Here for a link to the complete article