Factory data, construction spending show solid growth
Washington
US factory activity accelerated to a two-year high in December amid a surge in new orders and employment, suggesting some of the oil-related drag on manufacturing was fading.
Other data on Tuesday showed construction spending hitting a 101/2-year high in November, which could provide a lift to fourth-quarter economic growth. The reports suggested president-elect Donald Trump was inheriting a strong economy, marked by a labour market that is near full employment, from the Obama administration.
The Institute for Supply Management (ISM) said its index of national factory activity rose 1.5 percentage points to a reading of 54.7 last month, the highest since December 2014. A reading above 50 indicates an expansion in manufacturing, which accounts for about 12 per cent of the US economy.
A gauge of new orders jumped 7.2 percentage points, to the highest level since November 2014. A measure of factory employment rose 0.8 percentage point, to the highest level since June 2015.
In a separate report, the Commerce Department said construction spending increased 0.9 per cent to US$1.18 trillion in November, the highest level since April 2006. It was boosted by gains in both private and public sector investment. Construction spending in October was revised up to show a 0.6 per cent rise instead of the previously reported 0.5 per cent increase. Construction spending was up 4.1 per cent from a year ago in November.
November's solid increase and October's upward revision to construction spending could prompt economists to raise their gross domestic product estimates for the fourth quarter.
Spending on private construction projects jumped 1.0 per cent in November to its highest level since July 2006 as single-family home building, as well as home renovations, increased. Public construction spending gained 0.8 per cent in November to the highest level since March. It was the fourth straight month of increases. REUTERS
