Growth in Factory Output Slows
U.S. factory production grew more slowly in February as new orders and hiring eased, seeming to point to tempered growth for the economy in the coming year, an industry survey showed Tuesday.
Separately, the government reported that U.S. construction spending jumped 0.7% in January as both private and public construction hit record levels. Analysts said commercial construction drove the growth.
The Institute for Supply Management said its index of national manufacturing slipped to 55.3 in February from 56.4 in January, weaker than the forecast rise to 57.
With the Labor Department’s February employment report due Friday and a pick-up in payroll growth expected, analysts noted the more subdued reading for the employment component of the institute’s index.
But Gary Thayer, chief economist at A.G. Edwards & Sons, said even though the institute’s jobs index edged down to 57.4 from 58.1 in January, employment was still expanding.
The institute also reported a small decline in new orders during February -- to 55.8 from 56.5 -- and said its prices-paid index declined to 65.5 from 69.
The manufacturing index is compiled from monthly responses of purchasing executives at more than 400 firms.
In another report, the Business Roundtable, a group of chief executives from large U.S. companies, said its economic outlook index rose sharply for March to a record high of 104.4 from the December reading of 98.9, reflecting increased capital spending plans and confidence in further U.S. economic growth.
However, fewer of the CEOs plan to increase hiring during that period. Only 36% said they planned to increase employment in the next six months, down slightly from the 40% who said in December that they would boost hiring.
The Commerce Department said construction outlays in January rose to a record $1.05-trillion annual rate from an upwardly revised $1.04-trillion rate in December.
Wall Street analysts had forecast a 0.4% increase in January construction spending. December’s reading was revised to a 1.2% increase from the 1.1% rise originally reported.
