- Gregory Daco, head of U.S. macroeconomics at Oxford Economics
Activity in the US manufacturing sector slowed in August to the weakest level in more than two years, while construction spending surged to the highest level in more than seven years. According to the Institute for Supply Management, the index of national factory activity dropped to 51.1 from 52.7 in July, hitting the lowest since May 2013. Economists, however, had expected 52.6. The new orders sub-index plunged to 51.7 from 56.5 and also marked the lowest level since May 2013. The prices paid index declined to 39.0 from 44.0, while the employment index fell to 51.2 from 52.7 and the imports index hit its lowest level since January 2013 at 51.5. Despite US manufacturing staying in green territory, the pace of growth remained weak, underlining concerns surrounding the strong Dollar, sluggish overseas demand and a patchy first quarter. Markit Economic's data also confirmed deceleration in business activity of the US manufacturing sector, with the corresponding gauge coming in at 53.0, the lowest level since November 2013.
A separate report showed construction spending rose 0.7% to a seasonally adjusted annual rate of $1.08 trillion, the highest level since May 2008. Total construction spending has risen 13.7% over the past 12 months.
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