- - Wednesday, January 2, 2013

DETROIT — A healthier economy and more model introductions should push U.S. auto sales above the 15 million mark this year, an auto industry research analyst predicts.

The Polk research company says auto sales should continue to lead the country’s economic recovery, rising nearly 7 percent compared with 2012 to 15.3 million new vehicle registrations.

Automakers release December and full-year sales for 2012 on Thursday. Analysts think sales reached 14.5 million last year, the strongest performance since 2007 — just before Americans felt the impact of the recession. Sales of more than 15 million are considered a sign of health for the auto industry and the economy, many analysts say.

Polk does not expect pre-recession sales levels of 17 million for several more years, Anthony Pratt, Polk’s forecasting director for the Americas, said Wednesday.

Polk expects 43 new models to be introduced this year, up 50 percent from last year. New models usually boost sales. The company also predicts a rebound in sales of large pickups and midsize cars.

But Polk’s optimistic forecast firm hinges on Washington reaching an agreement on spending cuts, which could happen later in the year. On New Year’s Day, Congress approved a compromise to avoid the so-called “fiscal cliff.” The deal raises taxes for incomes exceeding $400,000 for individuals and $450,000 for couples. But it delayed action on dramatic federal spending cuts and debt, setting up another showdown in a divided Congress.


Manufacturing expanded slightly last month in U.S.

U.S. manufacturing grew slowly last month after shrinking in November and hiring increased. The modest gain suggests the economy entered the new year with some momentum.

The Institute for Supply Management said Wednesday that its index of manufacturing activity rose to 50.7 in December from 49.5 in the previous month. November’s reading was the lowest reading since July 2009, one month after the recession ended.

A reading above 50 signals expansion.

A measure of employment rose to the highest level in three months, suggesting that factories are adding jobs.

The closely watched survey was completed before Congress reached a deal to avoid the “fiscal cliff.”

The last-minute deal passed Tuesday averts widespread tax increases and delays deep spending cuts that had threatened to push the country back into recession. Still, most Americans will see some increase in taxes this year, which will likely slow consumer spending.


Report says delay worsened 2011 oil spill

BILLINGS, Mont. — Federal investigators say Exxon Mobil Corp.’s delayed response to a pipeline break beneath Montana’s Yellowstone River made the spill far worse than it otherwise would have been.

Department of Transportation investigators say the volume of the 1,500-barrel spill could have been cut by about two-thirds if pipeline controllers in Houston closed off the line as soon as problems emerged.

Instead, crude drained from a severed, 12-inch pipeline for another 46 minutes before a remote control valve near the river was finally closed.

A copy of the investigators’ report was provided to The Associated Press by the office of Sen. Max Baucus, Montana Democrat.

The July 1, 2011, spill fouled 70 miles of riverbank along the scenic Yellowstone. Exxon spent $135 million on cleanup and repair work.

An Exxon spokeswoman declined comment Wednesday, saying the company was still analyzing the report.


Spending dips 0.3% on building projects

U.S. builders spent less on construction projects in November, the first decline in eight months, as activity was held back by a big drop in spending on federal projects.

Construction spending dipped 0.3 percent in November compared with October, when spending had risen a revised 0.7 percent, the Commerce Department said Wednesday. The November decline was the first drop since March.

It left total spending at a seasonally adjusted annual rate of $866 billion, which is 16.1 percent above a 12-year low hit in February 2011. Even with the gain, the level of spending remained only about half of what’s considered healthy.

In November, spending on housing increased 0.4 percent, but spending on federal building projects fell 5.5 percent. Spending on nonresidential projects such as office buildings and shopping malls dropped 0.7 percent.

The weakness in nonresidential activity reflected declines in construction of office buildings, hotels and the category that includes shopping centers.

Overall government spending dipped 0.4 percent. That reflected the big decline in federal projects and a small 0.1 percent rise in spending on state and local projects.

According to a recent government report, builders broke ground on fewer homes in November after starting work at the fastest pace in more than four years in October. Housing starts are on track for their best year in four years.

From wire dispatches and staff reports.