NAPM, Construction Reports Show Struggling Economy

Two reports released Tuesday confirm that the U.S. economy remains sluggish.

The National Association of Purchasing Management said that its manufacturing index rose in August, but it remained in a contraction for the 13th straight month.

Also, U.S. construction spending fell 0.1% in July, the fifth month it has failed to increase, according to the Commerce Department.

Both of these reports reflect the health of trucking customers. Factories generate truck shipments of raw materials and parts coming in, and finished goods going out. Construction spending requires shipments of building materials, and leads to later shipments of appliances and home furnishings.

NAPM said that its monthly index rose to 47.9 last month from 43.6 in July. This marked its most significant gain in five years, and was much higher than the reading of 44 analysts were expecting, Bloomberg reported.

A reading under 50 signals manufacturing activity is contracting, so the improvement only signals the sector stemmed its pace of declines, but did not expand.

The new orders index, a critical gauge of demand for factory goods in the pipeline, rose to 53.1 in August from 46.3 in July -- suggesting new orders rose for the first time in more than a year, Reuters noted.

However, a decline in work performed on office, hotels and home improvement pushed construction spending down to an annual rate of $859.4 billion.

Bloomberg said that as more businesses eliminate jobs, more companies or postponing or delaying expansion plans, which reduces the demand for construction services.