5 Manufacturing Stocks To Buy For Second Half Of 2017

And unlike the period immediately after the presidential elections, June’s manufacturing gains and indications of wider economic improvement are backed up official and more well recognized indicators. In the first quarter, U.S. GDP increased by 1.4% according to the Department of Commerce’s third and final estimate, which, though modest, came in above earlier estimates.

It is now widely believed that the economy picked up pace in the second quarter. Fresh data from the Atlanta Federal Reserve’s GDPNow model predicts that growth hit a 3% pace during this period. Last month’s durable orders report was dismal but still showed that production of durable goods had increased by 2.8% over the first five months of this year.

Manufacturing Awaits Policy Initiatives

Prior to 2016, manufacturing had suffered years of stagnation due to a drop in worldwide demand, a decline in oil prices and a surging dollar. However, the sector staged a steady recovery in 2016 and continues to expand, regardless of the recent drop in oil prices. The only missing link at this point seems to be the plethora of policy promises which President Trump had reiterated during his presidential campaign.

Now, industry insiders claim that June’s pickup in the ISM Index is particularly notable because it has occurred without the promised policy level boost. In recent months, the Trump administration has faced fierce opposition in its attempts to enact policy changes. As a result, the manufacturing sector continues to wait for a clearer position on regulations, taxes and tariffs on imports.

However, in a recent article, Vice President Mike Pence was quick to point out that during the first five months of Trump’s tenure, manufacturing had added 55,000 new jobs. Pence also claimed that Trump has cut regulations to the extent that businesses in the U.S. will now enjoy savings of $18 billion every year. Additionally, Trump has approved the Dakota and Keystone pipelines, exited the Paris Accord and is rolling back the Clean Power Plan, all of which Pence claims will significantly aid manufacturing. 

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