What if housing rises and manufacturing falls?
By Avery Vise
Some of the numbers are worrisome. Factory orders seem to be slowing. And in June and July, the Institute for Supply Management’s Purchasing Managers Index showed a contraction – albeit a slight one – in the manufacturing sector. So ends nearly three straight years of expansion.
Also, the inventories-to-sales ratio throughout the U.S. economy rose in May and June to 1.29 – the highest since February 2010. Everyone should remember what happened when the inventories-to-sales ratio ballooned in late 2008. The inventories-to-sales ratio reflects far more than just the U.S. manufacturing industry, but it does reinforce the other weakening manufacturing indicators. As manufacturing goes, so goes trucking – at least in terms of freight volume.
