Showing posts with label manufacturing index. Show all posts
Showing posts with label manufacturing index. Show all posts

Tuesday, May 6, 2014

New Economic Indicators Point to an Improved U.S. Business Climate



The economy is picking up steam with positive markers in trade, manufacturing, consumer confidence and service industry growth. Multiple markers help encourage positive feelings among consumers and investors alike. As the market continues to show positive signs it will naturally influence the available purchasing habits of consumers and opportunities of investors.  Even though the positive signs are only blips on an economic radar they do lean toward potential new growth in the near future.

America is making its way back to global dominance as the trade gap narrows and worldwide demand for American products ticks slightly upward.  It is a small start…but it is a start. According to new numbers from the Trade Department the trade gap shrank 3.6% to $40.4 billion dollars from the prior month of $41.9 billion (1). This small adjustment in the trade gap highlights that there is some potential momentum in the market. 

Exports increased 2.1% to $193.9 billion in March (2).  This is good news for manufacturers and investors who seek to find higher rates of return. A small improvement in export growth indicates that there are opportunities within the market that are not fully realized or explored. Additional investment can help support those numbers to turn investment into profitable output.

Furthermore, information from the Institute for Supply Management also indicates that there is acceleration in manufacturing growth while the Labor Department states that 288,000 nonfarm roll jobs were added last month (3).  As production in manufacturing increases so does the likelihood of greater employment opportunities. 

Exports increased $3.9 billion in capital goods, industrial supplies, and automotive related products. Imports also increased $2.5 billion in consumer goods, capital goods, and foods, feeds and beverages.  The overall trend on the graph leans to the trend that growth in exportation is rising over time even though the individual quarters are bouncing from positive to negative. 

 Consumer confidence rose highly within the first quarter of 2014 sparked by a 6% increase with 44% of Americans feeling positive about putting money in the bank again (4).  The importation of personal products is a direct result of positive impressions in society as consumers make their way to the stores. Consumer confidence is also rising in other places creating an upward push on the demand for products and services. 

When consumer confidence rises people generally feel better about their prospects and are willing to spend more of their hard earned capital. This can create additional support for increases in manufacturing and service industry development. The service industry also saw a few percentage point rise around the first quarter thereby complementing other sectors (5). The countries that capitalize on supplying to the needs of the global market are more likely to see greater rebound. Before one can supply to that market they must understand the global market needs and put that within a progressive framework.