July Industrial Production Continues Trend of Slower Growth
According to the Federal Reserve, the durable goods industrial production index was 99.2 in July 2013. July is typically a light month for production as many facilities close for maintenance. So, while July production was the second lowest level of the year, it was an all-time record for the month of July. Despite, the all-time high for the month of July, the rate of growth continued to slow. The month-over-month growth rate fell to 2.3%, which is the slowest rate since January 2010. As a result, the annual rate of change has grown more slowly for 11 consecutive months, reaching its slowest rate of growth since August 2010. The annual rate of change is just slightly above the historical average rate of growth.
One of the best leading indicators for durable goods production is capital goods new orders. The month-over-month rate of change in capital good new orders has grown significantly the last three months. And, in the last month, the annual rate of change has moved from contraction to growth. These are very positive signs for durable goods production. This is an indication that we should see accelerating growth in durable goods production in 204.
We track industrial production and its leading indicators for a number of industries. Click on the links below to see how each industry is faring.
Decelerating Growth: aerospace; automotive; custom processors; durable goods; electronics, computers, and telecommunications; food and beverage processing; forming and fabricating (non-auto); furniture; hardware; HVAC; machinery and equipment; medical; metalcutting job shops; military; off-road and construction machinery; oil, gas field, and mining machinery; plastics and rubber; pumps, valves, and plumbing products
Accelerating Contraction: industrial motors, hydraulics, and mechanical components; power generation; primary metals; printing; textiles, clothing, and leather goods
Decelerating Contraction: none
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