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Nonmetallic Mineral Products: February 2016

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World Cement,

The USGS Nonmetallic Mineral Products Industry Index for February 2016 indicates that the industry’s leading indexdecreased 2.2% to 248.1 in January, from a revised 253.6 in December, while its 6-month smoothed growth rate declined to 2.5% from a revised 7.7% in December.

Despite the leading index growth rate decreasing in January, it is still above the threshold that suggests that activity is likely to increase. Residential construction activity is likely to underpin nonmetallic mineral products demand. Low unemployment, higher wages, and historically low interest rates, alongside home inventories below a balanced market level, will continue to promote home construction. However, nonresidential construction spending is predicted to slow in the near term, despite a restart in manufacturing plants construction.

Three of the four leading index indicators decreased in January, with one being essentially unchanged from its December level. A shorter average workweek in nonmetallic mineral products facilities contributed -1.0 percentage point to the net decrease in the leading index. A fall in the stock price index for building products companies in January also contributed -1.0 percentage point. A tighter yield spread between the U.S. 10-year Treasury Note and the Federal Reserve’s federal funds rate contributed -0.3 percentage point. In contrast, the index of new housing permits issued was flat in January and made no contribution to the leading index. However, building permits are over 13% higher than January 2015. The coincident index, which measures current industry activity, decreased 1.0% to 144.7 in January from a revised 146.1 in December. Its 6-month smoothed growth rate decreased to 6.3% in January from a revised 9.1% in December. Although the average workweek was shorter in nonmetallic minerals products manufacturing facilities, employment is at its highest level since May 2009. Industrial production remained close to the level before the 2008 – 2009 recession.

Adapted from press release by

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