According to the latest report from USGS, the nonmetallic mineral products industry leading index increased by 0.2% to 246.3 in March, from a revised 245.7 in February. Additionally, its 6-month smoothed growth rate increased to 0.4% from an upwardly revised 0.1% in February. This marks the first increase in the leading index growth rate since November, although it still remained below the threshold that would suggest an increase in activity in the nonmetallic mineral products industry.
Construction activity indicators, such as higher home prices and low home inventory levels, should support the residential construction sector’s demand for nonmetallic mineral products. However, residential construction activity has been slow in 2016. Nonresidential construction activity grew modestly year-to-date, with significant gains in the commercial building sector. Highway building boosted the heavy engineering sector as well. The nonmetallic mineral products demand from these construction activities will likely be slow to modest in the near term.
Two of the four leading index indicators increased in March, and two decreased. A rise in the S&P stock price index for building products companies made the largest positive contribution, 1.0 percentage points, to the net increase in the leading index. A wider yield spread between the U.S. 10-year Treasury Note and the Federal Reserve’s federal funds rate contributed 0.1 percentage point. In contrast, the index of new housing permits issued, which has generally slowed since November, declined further in March. It contributed -0.7 percentage points to the leading index. Most of that decrease came from a 20% drop in building applications for large multi-unit apartment buildings. A shorter average workweek in nonmetallic mineral products facilities contributed -0.3 percentage points.
The coincident index, which measures current industry activity, decreased 0.3% to 144.2 in March from a revised 144.6 in February. Its 6-month smoothed growth rate decreased to 4.1% in March from a revised 5.4% in February. Although the average workweek in nonmetallic minerals products manufacturing facilities was shorter in the first quarter of 2016, employment increased to its highest level since 2009.
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/the-americas/25042016/usgs-nonmetallic-mineral-products-industry-index-april-2016-968/