2014.06.0223:53:08UTC+00US to ride manufacturing sector to 2nd quarter showing

Signs are boding well enough for the US economy to open up a possible resurgence in the next few months after taking a dip during the year’s first quarter. Fueled by the strong showing of its manufacturing arm as well as a boom in construction spending, the growth of the world’s largest economy is looking back on track.

Revised figures released by the Institute for Supply Management (ISM) on Monday showed that activity in factories nationwide increased between the months of April and May when the manufacturing index climbed from 54.9 to 55.4. The ISM earlier reported the index to have dropped to 53.2, closer to the 50 benchmark level that separates growth and contraction in the industry.  

The gain in activity mostly came through a 5 month high in new orders and inventories with a slowing job growth. Also part of the updated report was increased inflation pressure on manufacturers due to the current rise in value of raw materials.

The ISM figures came at the heels of a similar but independent evaluation made by financial firm Markit where an improvement was also shown in their Purchasing Manager’s Index from April’s 55.4 to May’s 56.4.

Meanwhile, construction spending statistics relayed by the Commerce Department had the industry climb by 0.2% in April reaching its highest yearly rate in more than 5 years of $953.5 billion. The record high was urged on by the 0.8% increase in public outlays and major spending for federal and local projects, signaling the end for the drop in public construction. Another bright spot was in residential construction where the spending rate has climbed the most since March 2008.

These were welcome news for a US economy seeking to regain losses it suffered under a particularly harsh winter early in the year complemented by business’ low restocking all over the countries. During that time, lowered interest in factories and other nonresidential structures contributed greatly to the 1% decline in economic growth.

As a turnaround, separate economists from TD Securities in New York and IHS Global Insight in Lexington are looking optimistic for this quarter expecting an overall growth of around 4% and a continued rise in spending for construction.