Both the U.S. construction industry and manufacturing are seeing a bump in productivity above projected growth right now.
In November, spending on construction was at an all-time high following a 0.8% growth peak, a significant monthly gain when compared to the 2.4% annual growth the Commerce Department sees yearly. This reflects reinvested gains from the current bullish market.
“Strong manufacturing and construction data confirm the U.S. economy is firing on all cylinders at the turn of the year,” Reuters reports Sal Guatieri, BMO Capital Markets senior economist, saying.
America had a 10% market share of the world’s construction market, the second largest, until late last year. Due to the Yuan price strength wavering and sudden U.S. market movement, American construction is number one, for now, according to BMI Research.
Whether the U.S. is first or second in construction is subjective to currency valuations; however, the growth that both construction and manufacturing are going through is impressive.
Significant spikes in other industries could be observed as well. Since over 50% of American products require welding, there are positive implications for a number of related markets.
Mining metals might see a bump as manufacturing grows at an accelerated rate. Welders and skilled trade workers will certainly be in higher demand. The commercial real estate market is also speculated to grow through 2018.
Spending on private sector residential housing rose to the highest it’s been since 2007, closely following the homebuilding trend expectations. In fact, all construction sectors are either rebounding or reaching new heights in early 2018.
This might be bullish for big investors, but a senior economist at Oxford Economics, Nancy Vanden Houten, strikes a more reserved note on the eagerness of consumer spending.
“Many state budgets are being squeezed by weaker-than-expected revenues, and face other budgetary pressures related to things like health care,” said Vanden Houten. “Also, the impact of the new tax law on state and local budgets is not yet clear.”
Despite the skeptics, American manufacturing dominance may also be making a comeback in 2018. In fact, according to Fortune magazine, manufacturing executives world are predicting that the U.S. will dethrone China as the most competitive country in manufacturing by 2020.
Though many economists are predicting more modest gains in the new year, the charts are all lit up green for construction and manufacturing in the years to come.
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