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“Davidson” submits:

Total Construction Spending rises to a new record. Three of major categories, Residential, Public and Manufacturing posted higher levels while Power was lower. With the intensity around EVs, AI and reshoring manufacturing, I expect to see spending on Power projects to rise to new highs. Spending on Manufacturing facilities has risen to 185% of the August 2021, the sharpest rise in this series.

The PMI decline reported this morning does not make economic sense with rising Industrial Production and Construction Spending. The PMI often misleads investors being a market sentiment indictor but often taken as a favorite economic forecasting tool when there are no economic measures In it. The PMI is one of my favorite indicators for identifying buying opportunities in manufacturing stocks as its recession signals correlates with lows in manufacturing issues during upcycles in economic activity. In other words, a PMI recession signal is, in my opinion, always a buy signal for manufacturing issues.

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