A sold sign stands in front of a under-construction home in Houston. Associated Press
US factory activity powered ahead in early April, though manufacturers increasingly struggled to source raw materials and other inputs as a reopening economy leads to a boom in domestic demand, which could slow momentum in the months ahead.
The flow of strong economic data continued with another report on Friday showing new home sales racing to a more than 14-1/2-year high in March. The economy is being boosted by the White House’s massive $1.9 trillion COVID-19 pandemic rescue package and increased vaccinations against the virus.
Retail sales jumped to a record high in March and hiring accelerated, cementing expectations for robust growth in the first quarter and setting up the economy for what could be its best performance in nearly four decades.
Data firm IHS Markit said its flash US manufacturing PMI increased to 60.6 in the first half of this month. That was the highest reading since the series started in May 2007 and followed 59.1 in March.
Economists polled by Reuters had forecast the index rising to 60.5 in early April. A reading above 50 indicates growth in manufacturing, which accounts for 11.9% of the US economy.
“The U.S. economy is enjoying a strong start to the second quarter, firing on all cylinders as loosening virus restrictions, an impressive vaccine roll-out, a brighter outlook and stimulus measures all helped boost demand,” said Chris Williamson, chief business economist at IHS Markit.
More than half of American adults have had at least one vaccine dose, according to the U.S. Centers for Disease Control and Prevention (CDC). A third of US adults are fully vaccinated. That, together with the fiscal stimulus, has allowed for broader economic re-engagement.
But the strong demand is pushing against supply constraints. The pandemic has disrupted labor at factories and their suppliers, causing shortages that are boosting prices of materials and other inputs.
The IHS Markit survey’s measure of prices paid by manufacturers jumped to the highest level since July 2008. It attributed the higher input prices to “severe supplier shortages and marked rises in transportation fees.”
The continued rise in input costs is one of many factors expected to drive inflation above the Federal Reserve’s 2% inflation target this year.
Fed Chair Jerome Powell has expressed confidence that the supply chains will adapt and become more efficient, and prevent prices from remaining higher for a sustained period.
According to IHS Market supply shortages were causing backlogs of uncompleted work “of a magnitude not surpassed for over seven years.”
The raw material squeeze is most evident in the automobile industry, where a global semiconductor shortage has forced production cuts at motor vehicle assembly plants.
China’s new home prices rose in July as the property sector held up as one of the few bright spots in the slowing economy, although easing momentum in some markets took immediate pressure off regulators
Annual profits at China’s industrial firms surged in the first two months of 2021, highlighting a rebound in the country’s manufacturing sector and a broad revival in economic activity from the coronavirus crisis early last year.
The global manufacturing activity expanded in July, adding to hopes the sector is emerging from the hit of the coronavirus pandemic.
Home rental company Airbnb is aiming to raise around $3 billion in its upcoming initial public offering (IPO), people familiar with the matter said, taking advantage of the unexpectedly sharp recovery in its business after the COVID-19 pandemic roiled the travel industry.
The International Air Transport Association (IATA) announced continued strong passenger traffic demand in April. Total traffic in April 2023 (measured in revenue passenger kilometers or RPKs)
Global additions of renewable power capacity are expected to jump by a third this year as growing policy momentum, higher fossil fuel prices and energy security
CIT Group Ltd, a leading facility management service provider headquartered in Jeddah, Saudi, has chosen Facilio’s Connected CaFM software platform to digitally transform the facilities at Al Jadidah site.