The good news first: manufacturing activity rose last month for the first time in 19 months, according to a report by the Institute of Supply Management. The better-than-expected reading Tuesday revealed the highest number for the manufacturing index since June 2007. Further, the data showed new customer orders leaped to their highest levels since late 2004. While not definitive, this report gives hope that the nation is emerging from the deep recession it entered two years ago.
And now for the bad news: on Tuesday, fresh data from the Commerce Department showed that July construction spending fell 0.2 percent, worse than the flat reading that analysts had anticipated. While residential construction rose by 2.3 percent, it was still 27.8 percent lower than a year ago.
The report also showed that non-residential construction fell 1.2 percent, the third straight monthly decline. The weakness in July was led by by falls in spending on office buildings, hotels and shopping centers. Meanwhile, spending on government projects also fell by 0.7 percent, the first decline since January. While federal spending on construction projects rose 0.8 percent, the number was offset by a 0.8 percent drop in spending by state and local governments, which are facing strained budgets amid falling tax revenues.
