U.S. economic activity in manufacturing and construction – two sectors Canada’s export-based trucking industry are heavily linked too – continue to show substantial increases.
The manufacturing sector expanded in August for the 15th consecutive month, hitting its highest level since March 2011, according to the Purchasing Managers Index, by the Institute of Supply Management.
The New Orders Index registered 66.7%, an increase of 3.3 percentage points from the 63% reading in July, indicating growth in new orders for the 15th consecutive month.
Of the 18 manufacturing industries, 17 are reporting growth in August.
“Gains in new orders suggest that at least modest growth in manufacturing is likely to continue for the next month or two, a welcomed support for the third quarter gross domestic product,” said Lindsey Piegza, chief economist at the investment firm Sterne Agee. “Of course as American factories appear to be ramping up production with further reports showing gains in inventories and lingering stockpiles of goods, consumer spending continues to show signs of weakness as minimal income growth restrains overall consumption.”
She warned this clear disconnect will need to be rectified sooner rather than later with either a reduction in goods production or a ramp up in consumer spending.
A separate report from the U.S. Commerce Dept. show total U.S. construction spending in July increased 1.8% from June’s level, its biggest gain since May 2012 and its highest level since December 2008.
The July level is also 8.2% higher than from the same time in 2013, while the pace of construction spending in the first seven months of the year is running 7.9% higher than during the same period last year.