Still Above Water
The widely followed pair of purchasing manager surveys from the Institute for Supply Management point to continued, slow expansion. Readings above the neutral threshold of 50 signal growth while readings below 43 are a sign of recession. The manufacturing index was 50.8 last month, down slightly from September, while the non-manufacturing reading came in at 52.9, virtually unchanged from the prior month. New orders, an indicator of future production, also stayed in the black at 52.4 for both sectors. Taken together with other recent data on retail sales, GDP, industrial production and jobless claims, the ISM indexes suggest that the economy has moved past its late summer swoon when the debt ceiling debate in the U.S. and the ongoing drama surrounding Greece cratered confidence, threatening a double-dip recession. Grubb & Ellis pointed to this scenario in its second quarter “Office Market Trends” report published in July, when we asked: “Was the surprising [high] second quarter absorption a delayed response to the stronger economy earlier in the year, or could it be that businesses, especially large and profitable ones, are more willing to take on multi-year space commitments than the recent economic data would suggest?” This is one of the rare instances where the office market was telling us more about the economy than vice versa.
We will cover the November employment report, due for release this morning, in our Monday research release, the “Weekly Market Update.”
Have a great weekend.
SVP, Chief Economist
Grubb & Ellis
To unsubscribe from this email select "Reply" and type "Unsubscribe me" in the subject field.
© 2011 Grubb & Ellis, all rights reserved.