June Production Hits All-Time High While Growth Rate Slows
According to the Federal Reserve, the durable goods industrial production index was 106.3 in June 2013. This is the highest durable goods production index ever by 2.0 points (the previous high value was in March 2013). While the index set a new all-time high, the month-over-month rate of growth continued to slow down. The index in June was 2.8% higher than it was in June 2012. This was the slowest month-over-month growth rate since January 2010, which was the first month of growth in durable goods production since the financial collapse in 2008. Consequently, the annual rate of change has slowed each of the last eight months, reaching its slowest rate of growth since August 2010.
One of the best leading indicators for durable goods production is capital goods new orders. The annual rate of change in new orders has contracted at a slower rate the last two months. The annual rate of change seems to have bottomed and could start growing soon. This is a positive sign for future growth in durable goods production. While the rate of change in durable goods production will continue to slow in the short term, the trend in capital goods new orders is indicating that durable goods production may start growing faster again in 2014.
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; durable goods; electronics, computers, and telecommunications; food and beverage processing; forming and fabricating (non-auto); furniture; hardware; machinery and equipment; metalcutting job shops; military; off-road and construction machinery; oil, gas field, and mining machinery; pumps, valves, and plumbing products
Decelerating Contraction: none
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