The nonmetallic mineral products industry leading index decreased 2.4 percent to 240.5 in July from a revised 246.3 in June, and its 6-month smoothed growth rate fell to -0.7 percent from 4.3 percent in June. The 6-month smoothed growth rate is a compound annual rate that measures the near-term trend.
A growth rate above +1.0 percent is usually a signal of future growth in industry activity, while a growth rate below -1.0 percent points to a decrease in activity.
The leading index growth rate has generally trended down since the start of 2013 and has now moved near the threshold that signals a decrease in nonmetallic mineral products industry activity. This sharp decline, after three recent consecutive rises, in the leading index growth rate suggests that industry activity growth could slow further.
The latest data on construction spending show that nonresidential construction, which accounts for two-thirds of all construction spending, has decreased. Furthermore, falling oil prices have reduced industrial minerals consumption from unconventional oil and gas drilling and servicing.
In contrast, new home sales have increased 25 percent since last July and housing inventories are below a balanced housing market level; this bodes well for nonmetallic minerals consumption from future residential construction activity.