Purchasing Managers Index jumps into positive territory. The PMI registered 51.5 percent, an increase of 1.9 percentage points from August’s reading of 49.6 percent, indicating a return to expansion after contracting for three consecutive months, according to the Institute for Supply Management (ISM), Tempe, Ariz. The ISM press release said its New Orders Index registered 52.3 percent, an increase of 5.2 percentage points from August, indicating growth in new orders after three consecutive months of contraction.
Dodge Momentum Index dips in September. The Dodge Momentum Index retreated 0.8% in September compared to August, according to McGraw-Hill Construction. The September Momentum Index came in at 94.7 (2000 =100), down from a revised 95.4 in August and 96.7 in July. Uncertainty, particularly related to the impending presidential election and yearend expiration of the Bush tax cuts combined with automatic spending cuts (the “fiscal cliff”), is likely the main contributor to this short-term hesitation in future development plans. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.
Conference Board’s Leading Economic Indicators slip in August. The Leading Economic Index (LEI) for the U.S. declined 0.1 percent in August to 95.7 (2004 = 100), following a 0.5 percent increase in July and a 0.5 percent decline in June. Says Ken Goldstein, economist at The Conference Board, “The economy continues to be buffeted by strong headwinds domestically and internationally. As a result, the pace of growth is unlikely to change much in the coming months. Weak domestic demand continues to be a major drag on the economy.”
AAR reports mixed weekly rail traffic. The Association of American Railroads (AAR), Washington, D.C., reported mixed weekly rail traffic for the week ending Oct. 6, with U.S. railroads originating 283,440 carloads, down 6.3 percent compared with the same week last year. Intermodal volume for the week totaled 251,113 trailers and containers, up 3.8 percent compared with the same week last year.