In December, the nonmetallic mineral products industry leading index increased 0.1% to 253.3. This is an increase from a revised 253.0 in November, although its 6-month smoothed growth rate decreased from 7.5% from a revised 8.1% in November. The high leading index growth rate suggests that activity in the nonmetallic mineral products industry is likely to increase.
Total construction spending is at its highest level since before the last recession. Non-residential construction spending is still more than 10% higher year-to-date than last year, despite a sharp decrease in manufacturing plants construction. Residential construction activity is supported by rising employment, higher wages and historically low interest rates. Demand from residential construction for nonmetallic mineral products is likely to continue increasing as new home sales increased by nearly 15% during 2015 and new home inventories are still below a balanced housing market level.
Of the four leading index indicators, the average workweek was the only one to increase in December. It contributed 0.5% to the net gain in the leading index. In contrast, the decrease in the index of new housing permits issued contributed -0.3%, owing to a decrease in permits in the volatile multi-unit apartment building segment for total housing permits index. However, building permits for single-family homes, which is the larger segment, increased 8.0% from November. Total housing permits for 2015 were 12% higher that in 2014. The stock price index for building products companies was essentially the same as it was in November.
The coincident index, which measures current industry activity, increased 1.1% to 146.7 in December from 145.1 in November. Its 6-month smoothed growth rate increased to 8.6% in December from 7.3% in November. Employment in the nonmetallic minerals products industry is the highest that it has been since May 2009. Production is back to the level before the 2008-2009 recession.
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