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Reports show slowdowns in manufacturing, construction

April 1, 2015

Two monthly reports released Wednesday show a slowdown in U.S.  manufacturing and construction.

U.S. factories expanded in March at a weaker pace, with orders growing more slowly and hiring essentially flat.

The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index slipped to 51.5 in March, from 52.9 in February.

It was the fifth straight drop. Still, any reading above 50 signals expansion.

U.S. manufacturers have faced a drag in recent months from falling oil prices and a rising dollar.

Some drilling rigs have stopped as oil prices have fallen more than 50 percent since June to below $50 a barrel, curbing demand for pipelines and machinery from factories.

Simultaneously, the dollar has risen in value against the euro and other currencies, making American-made goods more expensive abroad and cutting into exports.

Meanwhile, U.S. construction spending slipped for the second month in February, pulled down by a drop in single-family home building.

Construction spending fell 0.1 percent in February after a revised 1.7-percent drop in January, the Commerce Department reported Wednesday.

The result in part reflects bitter winter weather that likely constrained construction in many parts of the country during the month. Economists are hopeful for a rebound in the spring and summer as the economy strengthens.

Private spending on construction of single-family homes declined 1.4 percent, while spending on apartments was up 4.1 percent. Nonresidential construction spending rose 0.5 percent, led by a 5.5-percent jump in hotel construction and a 6.8-percent jump in factory construction.

Private economists had expected overall spending to be flat.

Construction spending was up 2.1 percent from February 2014.

The economy added 338,000 construction jobs last year, the most since 2005. Still, damage from the collapse of the housing market lingers: The United States has nearly 1.4 million fewer construction jobs than it had in 2006.
 

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