USGS has released it Nonmetallic Mineral Products Industry Indexes for May 2016.
The nonmetallic mineral products industry leading index increased 1.6% to 249.7 in April from a revised 245.7 in March, and its 6-month smoothed growth rate increased to 2.4% from a revised -0.2% in March.
After declining since November, the leading index growth rate has risen above the threshold that normally suggests an increase in activity in the nonmetallic mineral products industry. Construction activity indicators, such as higher home prices and low home inventory levels, are likely to support the residential construction sector’s demand for nonmetallic mineral products. Residential construction activity was slow at the start of 2016; however, low unemployment and higher wages subsequently lifted new home sales 16.6% in April. This trend is likely to continue if interest rates remain low. In contrast, nonresidential construction activity, which accounts for two-thirds of construction spending, grew much slower year-to-date.
The reduced industrial mineral products demand from nonresidential construction activities will likely slow growth in the nonmetallic mineral products industry in the near term. Three of the four leading index indicators increased in April and one decreased. A 1-half hour longer average workweek in nonmetallic mineral products facilities made the largest positive contribution, 0.9 percentage point, to the net increase in the leading index. The rising S&P stock price index for building products companies contributed 0.4 percentage point. The index of new housing permits issued, which had declined since November, increased in April. It contributed 0.3 percentage point to the leading index. Most of that increase came from a nearly 10% surge in building applications for large multi-unit apartment buildings. In contrast, a tighter yield spread between the U.S. 10-year Treasury Note and the Federal Reserve’s federal funds rate contributed -0.1 percentage point (table 2).
The coincident index, which measures current industry activity, increased 1.0% to 145.2 in April from a revised 143.8 in March. Its 6-month smoothed growth rate increased to 5.2% in April from a revised 4.2% in March. The construction sector slowed its rate of new hires in April, but offered longer hours to its existing employees.
Adapted from press release by Rebecca Bowden
Read the article online at: https://www.worldcement.com/the-americas/26052016/usgs-indexes-for-may-2016-174/