Industrial production, Beige Book suggests strong September but not for construction
Industrial production in September at the nation's factories, mines, and utilities rose 0.4%, seasonally adjusted, following a dip of 0.1% in August, the Federal Reserve reported Thursday. Manufacturing output rebounded by 0.7% after an 0.3% drop, although it remained 0.6% below the September 2002 level. Capacity utilization in manufacturing reached 73.1% in September, up from 72.7% in August but a point below the year-ago level. Sustained increases in output and capacity utilization may be needed before demand for factory construction improves. Output of construction supplies fell 0.2% in September and 3.1% over the past 12 months.
The Fed issued its latest "Beige Book" summary of business conditions in the 12 Fed districts on Wednesday, saying "on balance, the pace of economic expansion has picked up since the last report [covering July to mid-August]. Ten of the 12 districts indicate that activity has been expanding, while two-Boston and Cleveland-report mixed but steady levels of economic activity .Commercial real estate markets continue to be characterized as weak in almost all districts. Still, a number of districts indicate slight signs of firming since the last report-specifically New York, Cleveland, Atlanta, St. Louis, Kansas City, and Dallas. On the other hand, renewed signs of slowing are reported from Chicago and Minneapolis, while conditions are described as stagnant in Richmond and San Francisco."
Housing starts in September climbed 3%, seasonally adjusted, to virtually tie July's level of 1.89 million, the government reported Friday. The July total was the highest in 17 years. For the first nine months of 2003, starts are 5% ahead of January-September 2002, with single-family starts up by 8% and multi-family starts down 3%. Building permits dipped 2% in September from August's upwardly revised level of 1.90 million. Year-to-date permits are up 6% overall, with single-unit permits 8% higher and multi-unit permits unchanged from the same period in 2002. Builders remain extremely confident. The National Assn. of Home Builders reported Thursday that its Housing Market Index, a monthly survey of builders, rose to 72 in October, the highest level since December 1999. All three subindexes were up: current sales conditions, sales expectations for the next six months, and traffic of prospective buyers.
Retail and food services sales in September slipped 0.2%, seasonally adjusted, the Census Bureau reported Wednesday. The August gain was revised up to 1.2% from an initial estimate of 0.6%. Sales in September were 7.5% ahead of September 2002.
The consumer price index for all urban consumers (CPI-U) in September rose 0.3%, seasonally adjusted, the Bureau of Labor Statistics (BLS) reported Thursday. The index was 2.3% higher than a year before. The CPI for urban wage earners and clerical workers (CPI-W), used for adjusting many construction wage contracts, also rose 2.3% over the past 12 months. The "core" CPI-U, omitting food and energy costs, was up 0.1% for the month and just 1.2% for the 12-month period, its slowest rise in decades.
Real (adjusted for change in the CPI-W) average weekly earnings of production or nonsupervisory workers, seasonally adjusted, dropped 0.3% in September and 0.2% over the past 12 months, BLS reported Thursday. Hourly earnings before seasonal or price adjustments rose 2.4% over the year but average weekly hours fell, leaving average weekly earnings before inflation adjustment up by just 1.3%. Among construction workers, average hourly earnings rose 1.9% over the year ending in September to $19.15, 24% above the average for all private-industry production workers. Weekly construction earnings averaged $749, up 1.4% from September 2002.
The national average on-highway diesel
fuel price moved up for the third straight week to a two-month high of $1.50, the
Energy Information Administration reported this afternoon. Nevertheless, diesel prices
have remained in a narrow range of $1.42-$1.51 since late April, far less volatile than
gasoline prices, which have ranged between $1.51 and a record $1.79 in that time.
Today's average for all grades of gasoline was $1.61, virtually unchanged from the previous
The Data DIGest is a weekly summary of economic news; items most relevant to construction are in italics.
Copyright © 2002 Mike Holt Enterprises,Inc.