US manufacturing sector recovers after severe weather

sector manufactura

 

Tempe, Arizona, March 3rd, 2014.- Manufacturing activity in the US has registered a non-expected growth rate. According to the Institute for Supply Management (ISM), the manufacturing index rose to 53.2 from 51.3 in past January.

 

Data show that construction rose slightly in January, due to the increase in residential construction. Manufacturing and construction are key sectors for the US economy and expectations were that the severe weather conditions may affect some sectors.

 

Bradley Holcomb, chairman of the ISM survey committee said that while some manufacturers said bad weather was impacting their business negatively, other comments on the optimism in terms of demand and growth in a short term.

 

According to the US Department of Commerce, construction spending rose slightly in January (0.1%), a very low increase compared to the figures of January 2013 (9.3%).

 

On the one hand, improvements are expected in the short term, and on the other, auto sales results have been affected due to the weather. Ford, General Motors and Toyota saw a fall in deliveries during January and February.

 

General Motros registered a 1% fall compared to analysts forecast of a 6%. Chrysler and Nissan overcame the negative trend with sales increases of 11% and 16% respectively.

 

Analysts said that the negative effect was mostly beaten due to incentives and discounts offered by dealers in order to lure customers into showrooms and damp the impact of the extreme weather conditions.

 

Larry Dominique, executive vicepresident of TrueCar, said that incentive spending is outpacing the rise in average transaction prices. According to TrueCar, the average incentive being offered to customers was around 2,633 dollars per vehicle, 5% more than last year.

Dominique expects discounts to be reduced as the weather conditions improve, and that things will be normal by the end of winter.

 

 (Mexican Business Web, with media information)

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