How Supply Managers See Business
Staff -- Purchasing, 12/8/2005
- "Economic growth in the U.S. is likely to moderate in coming months. But, there is no recession in sight," says Lakshman Achuthan, managing director at Economic Cycle Research Institute, an independent forecasting group. He admits that cross-currents have come from sliding housing activity, higher commodity prices, improved manufacturing activity and lower jobless claims.
- U.S. home sales are showing further signs of slowing. Rising mortgage rates, higher energy costs, fear of a housing bubble and a surge in the number of houses for sale explains why sentiment among members of the National Association of Home Builders plunged in November to the lowest level in 30 months. Residential construction fell 5.6% in October to a 2.014 million annual rate—the largest decline since a 17.7% drop in March. Building permits, an indicator of future construction activity, fell 6.7% to a 2.071 million annual rate in the steepest drop since September 1999.
- U.S. industrial production rebounded in October, posting its biggest increase in more than a year as many industries ramped up activity following recent hurricanes. Federal Reserve data show industrial production surged 0.9% last month, its biggest increase since May 2004. Capacity utilization rose in October to a level of 79.5% from a revised 78.9% in September.
- Excluding often-volatile prices for energy and food, consumer prices increased 0.2% in October, the biggest rise in the "core" inflation rate since March. This is adding to concern in some quarters that high energy costs are starting to seep into other parts of the economy. In fact, year-over-year core inflation remains on the firm side, at 2.1% and some forecasters expect that measure to creep up. Global Insight, for example, expects core inflation to rise to around 2.5% next year.
- Bad news for manufacturing: the Commerce Department says business inventories reached $1.28 billion in September, up 0.5% from August, as auto dealers and other retailers posted significant increases in inventories. High unsold stocks usually trigger factory slowdowns.
- Europe's economy is pulling out of a slump, the European Commission now says, predicting growth will accelerate to 2.1% in 2006 from 1.5% this year. The rebound will come from renewed business confidence and a strong outlook for the global economy. A caution: The expected European economic rebound still could be derailed if oil prices jump or consumer confidence deteriorates, the EC says.
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
Now Playing:
