Last updateTue, 24 Apr 2018 7pm


IHS Markit U.S. Manufacturing Index Rose in April

Manufacturers reported the greatest improvement in overall business conditions since September 2014 in April. This was highlighted by the seasonally adjusted IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) rising from 55.6 in March to 56.5.

Stronger growth in new orders drove a solid increase in the level of outstanding business at manufacturers. Robust client demand and signs of sustained pressure on capacities did not, however, lead to improved employment growth. The rate of job creation eased to an eight-month low as firms reportedly pushed for greater efficiency. 

March Construction Starts Advance 11%

New construction starts in March increased 11% from the previous month to a seasonally adjusted annual rate of $785.2 billion, according to Dodge Data & Analytics. The substantial gain followed modest declines in January (down 2%) and February (down 3%) and brings the pace of total construction starts to the highest level over the past six months. The nonbuilding construction sector, comprised of public works and electric utilities/gas plants, soared 73% in March, boosted by the start of several very large projects. These included the $3.5 billion Mountain Valley Pipeline expansion in West Virginia and Virginia and the $1.1 billion I-405 highway project in Orange County CA. 

Beige Book: Solid Outlook Despite Tariff Concerns

Economic activity continued to expand at a modest to moderate pace across the 12 Federal Reserve Districts in March and early April. Outlooks remained positive, but contacts in various sectors including manufacturing, agriculture and transportation expressed concern about the newly imposed and/or proposed tariffs.

In general, manufacturing respondents were optimistic in their outlook. However, two contacts brought up the proposed China tariffs and said they represent a major risk. Of seven firms contacted this cycle, only one reported a year-over-year decline in sales and four reported higher sales versus the same period a year ago. 

IMF Predicting Global Economic Upswing

World growth strengthened in 2017 to 3.8%, with a notable rebound in global trade. It was driven by an investment recovery in advanced economies, continued strong growth in emerging Asia, a notable upswing in emerging Europe, and signs of recovery in several commodity exporters. Global growth is expected to tick up to 3.9% this year and next, the International Monetary Fund (IMF) forecasts, supported by strong momentum, favorable market sentiment, accommodative financial conditions and the domestic and international repercussions of expansionary fiscal policy in the U.S. The partial recovery in commodity prices should allow conditions in commodity exporters to gradually improve.  

CEO Confidence Increased Again in First Quarter

The Conference Board Measure of CEO Confidence, which rebounded in the fourth quarter of 2017, made further gains in the first quarter of 2018. The measure now reads 65, up from 63 in the fourth quarter of 2017 (a reading of more than 50 points reflects more positive than negative responses).

CEOs’ assessment of current economic conditions was slightly more positive, with 75% saying conditions are better compared to six months ago, up from 71% in the fourth quarter of last year. CEOs were also moderately more optimistic in their appraisal of current conditions in their own industries. Now, 51% say conditions in their own industries have improved, up from 49% last quarter. 



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