NFDA Report: U.S. in Early Stages of Mild Recovery
3/8/2010
NFDA Report: U.S. in Early Stages of Mild Recovery
In October 2009, the U.S. Industrial Production Index dropped to its lowest level since 1946. Now the U.S. is in the early stages of a mild recovery, according to a report prepared for the National Fastener Distributors Association.
“Increasing activity is underway in most industries and the rate of decline is slowing in others,” according to the NFDA report by the Institute for Trend Research.
However, nonresidential construction will continue downward through 2010, but “as a generally lagging indicator, that is normal,” the Institute noted.
The U.S. Leading Indicator has posted its 10th straight month of rise and that index result thus indicates increasing activity in the U.S. economy during this year.
The ISM Purchasing Managers Index also indicates improvement this year. The Index rose to 58.4 in January – its highest level in six years.
The Purchasing Index is in its sixth month above 50, which indicates the manufacturing sector is expanding.
“However, the 1/12 inched downward in January, clouding the outlook for 2011,” the report added. “If the 1/12 reversal holds, this will be the third leading indicator warning of a possibly weaker economy in 2011. The other indicators are Corporate Bond Prices and Money Supply.
• The ITR shows Retail Sales – not including automobiles – are showing signs of stabilizing. Sales for 2009 were 3% below 2008, but holiday sales edged up 0.4% – for the first positive December since 2006.
ITR observes that the mild November to December retail rise shows the sector remains weak, but that the worst of the decline is probably over.
• Housing Starts have moved into Phase A, but the 3.5% rise or 33,000-unit increase forecasted for 2010 is not much.
The decline in the Nonresidential Building is just beginning. The recession increased office and retail vacancies that must be absorbed before construction increases.
• “Corporate Bond Prices in December sounded a bell of warning for 2011,” ITR pointed out. “If the downward trend continues, it tells us that long-term interest rates may become problematic for the economy as early as 2011.”
• “The leading indicators support recovery in the Production Index in 2010, but the recovery will be mild,” ITR summarized.
“Unemployment at 10% will damp consumer confidence and keep the recovery in retail sales mild. The rise in Housing Starts is expected to be tepid at best and nonresidential construction is just beginning to slow. Activity will improve in 2010, but in some areas it will hardly be noticeable.” ©2010 GlobalFastenerNews.com
Related Stories:
• SPS Adds 50 Machinist Jobs in Pennsylvania
Related Links:
There are no comments at the moment, do you want to add one?
Write a comment