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2015-07-02

US manufacturing growth slows in June, survey shows

US manufacturing growth eased in June despite jobs growth, but there was better news for the construction sector, according to two surveys.

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Markit's latest Purchasing Managers' Index fell to 53.6, from 54 in May, the lowest reading since October 2013.

Although any reading above 50 indicates expansion, analysts said the strong dollar was weighing on factory orders.

Meanwhile, the US Commerce Department said construction activity in May was its highest since late 2008.

Chris Williamson, chief economist at Markit, said in a statement that the PMI index pointed to a wider US economic slowdown.

"Purchasing managers are reporting the slowest rate of manufacturing expansion for over a year-and-a-half, suggesting that the economy is slowing again.

"The slowdown is largely linked to a third consecutive monthly fall in exports, in turn attributed by many companies to the strong dollar undermining international competitiveness," Mr Williamson said.

The weaker figure for June was despite the data's employment sub-index rising to 55.5 in June, up from 54.6 in May and the highest level since September 2014.

'More space'

Meanwhile, US construction spending posted a solid gain in May, led by a big jump in non-residential projects.

The Commerce Department said spending rose by 0.8% from April, pushing total activity to a seasonally adjusted annual rate of $1.04 trillion, the highest level since October 2008.

All major categories showed increases in May, led by a 1.5% rise in non-residential building, which reflected increases in spending on hotels, manufacturing facilities and amusement parks, the Department said.

Developers said the spending on non-residential projects hailed positive news for the jobs market.

"It's fuelled by the feeling that the job growth is there, and tenants have need for more space because of new employees,'' said Richard Bezold, chairman of Akerman's real estate.

bbc

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