Institute Supply Management Index Hits New High As Housing And Manufacturing Strengthen

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The economy in the USA is picking up steam, led by a housing market that is putting more demand on the manufacturing sector in a welcome ripple effect.

The Institute for Supply Management ( ISM ) reports robust gains in the United States manufacturing sector, while analysts at Goldman Sachs project that home construction will grow by as much as 15% in 2015-2016.The encouraging news from the ISM is based on its PMI index, which tracks purchasing manager activity throughout the USA.

Among other factors, the PMI crunches employment numbers and the levels of inventory on company shelves. Last month the PMI hit a 12-month high, registering 59%. To put that figure into perspective, the PMI slumped as low as 46.4% during the peak of the recession and have averaged just below 55% for 2014. Breaking out of that average territory to the high side in confident fashion is yet another signal that the domestic manufacturing sector is strong.

Meanwhile, the housing sector continues to lead the recovery, and residential investment grew more than 7% in the second quarter, at an annualized rate. Goldman Sachs analysts cited by Bloomberg explain that longer term, the demand for new housing will continue to increase because members of the millennial generation are starting to buy homes and raise families. Economists also point out that when housing leads the recovery it provides a strong, diversified base because of the knock-on effect that happens as people who buy houses also buy products to fill them and services to maintain or improve them.

But as Meghan Robinson, CEO of Sunovis Financial, notes, the real catalyst behind any housing market is the availability of mortgage funds. “Many first-time homebuyers and small business owners came of age during the worst recession in history. That means that they have less than perfect credit and may not qualify for a traditional loan. But private lenders have more user-friendly underwriting guidelines. They may also be more willing to loan to young entrepreneurs who are just starting out in business or to young couples buying their first home.”

With the right funding at the right time, this new generation of business owners can succeed – which provides the financial prosperity necessary to facilitate other activity that boosts and sustains the economy. They can hire more employees, place larger orders from domestic manufacturers, and they and their employees can more easily afford to buy homes and participate in that part of the American Dream.

“Access to loans is the fuel that will ultimately keep the recover strong and stable going forward,” says Robinson. “Private alternative lenders are funding more loans now, and that is further evidence that the economic recovery is real.”

Contact Info:
Name: Meghan Robinson
Email: Send Email
Organization: Sunovis Financial
Address: Overland Park, KS
Phone: 1 855 243-7191
Website: http://www.sunovisfinancial.com

Release ID: 64143

CONTACT ISSUER
Name: Meghan Robinson
Email: Send Email
Organization: Sunovis Financial
Address: Overland Park, KS
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