by Calculated Risk on 8/03/2009 11:19:00 AM

From CBS MarketWatch: Ford U.S. July sales rise 2.3%

Ford Motor said Monday that U.S. July sales rose 2.3% to 165,279 vehicles, reversing nearly two years of monthly year-over-year losses.

Ford said the "Cash for Clunkers" program helped July sales (no kidding).

This is the first year-over-year increase reported by Ford since November 2007.

Notes: The auto companies compare sales to the same month of the previous year (so this is compared to July 2008). Auto sales will be released all morning, and I'll post a saesonally adjusted graph when a summary is available.

by Calculated Risk on 8/03/2009 10:21:00 AM

Private residential construction spending increased slightly in June and is now 63.6%% below the peak of early 2006.

Private non-residential construction spending declined in June, but is only off 6.7% below the peak of last September.

Overall construction spending increased with a boost from public spending.

Click on graph for larger image in new window.

The first graph shows private residential and nonresidential construction spending since 1993. Note: nominal dollars, not inflation adjusted.

Residential construction spending increased slightly in June, and nonresidential spending declined a little. From other data (new housing starts), it appears that residential spending has stabilized and might increase in Q3 - however private nonresidential construction will be falling off a cliff.

The second graph shows the year-over-year change for private residential and nonresidential construction spending.

Nonresidential spending is off 4.8% on a year-over-year basis, and will turn strongly negative as projects are completed. Residential construction spending is still declining YoY, although the negative YoY change will get smaller going forward.

As I've noted before, these will probably be two key stories for late 2009: the collapse in private non-residential construction, and the probable bottom for residential construction spending. Both stories are still developing ...

From the Census Bureau: June 2009 Construction at $965.7 Billion Annual Rate

Spending on private construction was at a seasonally adjusted annual rate of $643.9 billion, 0.1 percent (±1.1%)* below the revised May estimate of $644.8 billion. Residential construction was at a seasonally adjusted annual rate of $246.1 billion in June, 0.5 percent (±1.3%)* above the revised May estimate of $244.7 billion. Nonresidential construction was at a seasonally adjusted annual rate of $397.9 billion in June, 0.5 percent (±1.1%)* below the revised May estimate of $400.0 billion.

In June, the estimated seasonally adjusted annual rate of public construction spending was $321.7 billion, 1.0 percent (±2.4%)* above the revised May estimate of $318.5 billion.

by Calculated Risk on 8/03/2009 10:00:00 AM

PMI at 48.9% up from 44.8% in June. Still contracting (below 50) but contracting at a slower pace.

From the Institute for Supply Management: July 2009 Manufacturing ISM Report On Business®

Economic activity in the manufacturing sector failed to grow in July for the 18th consecutive month, while the overall economy grew for the third consecutive month following seven months of decline, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The decline in manufacturing was slower in July when compared to June, as the more leading components of the PMI — the New Orders and Production Indexes — rose significantly above 50 percent, thus setting an expectation for future growth in the sector. The Employment and Inventories Indexes are still contracting, but the rate is slowing and they are moving in the right direction. It is also worth noting that the New Export Orders Index shows growth following nine consecutive months of decline, suggesting that the global economy is recovering. Overall, it would be difficult to convince many manufacturers that we are on the brink of recovery, but the data suggests that we will see growth in the third quarter if the trends continue."
emphasis added

As noted, any reading below 50 shows contraction, although the pace of contraction has slowed and new orders suggest some growth later this year.

by Calculated Risk on 8/03/2009 08:56:00 AM

From The Times: UK manufacturing 'pulls out of nosedive' in July

British manufacturing grew for the first time in 16 months during July ...

According to the Chartered Institute of Purchasing & Supply (CIPS), the Purchasing Managers Index, which measures activity in the manufacturing sector, rose from a reading of 47.4 to 50.8 between June and July.

It is the first time the measure has risen above 50, the dividing line between contraction and growth, since March 2008.

David Noble, chief executive of CIPS said: "The manufacturing sector has clearly pulled out of the nosedive it was in earlier this year and is no longer plummeting.”

He said customers had cut inventories so severely in the downturn that they were now in need of new stock ...

The end of cliff diving isn't the same as new growth.

In the U.S., the ISM Manufacturing Index for July will be released this morning, and also July vehicle sales - with sales probably above 10 million units SAAR for the first time this year.

Construction spending for June will also be released this morning.

by Calculated Risk on 8/03/2009 12:32:00 AM

From Nick Timiraos and James Hagerty at the WSJ: High-End Homes Frozen Out of Budding Housing Rebound

Housing is fast dividing into two markets: Sales of low- and moderately priced homes are picking up and values have stopped falling in some parts of the nation. But on the upper end, sales remain mired in a deep slump and price declines are expected to accelerate.
...
The divide between the mass market and the high-end -- generally defined as homes that cost above $750,000 -- partly reflects the effects of Washington's housing-rescue plan, which is producing winners and losers.
...
To be sure, the affluent housing market is substantially smaller than the mass market. Sales of existing homes priced over $750,000 accounted for 2.3% of all sales in the first quarter of this year, compared to 4.4% of the housing market in 2007, according to the National Association of Realtors.

But what percentage of the market in 2005?

The low end is doing well because of first time buyers and investor groups buying properties (see previous post). Prices in the mid-to-high end are stickier and will probably decline for some time.