January 2015 Production Grows at Fastest Rate since July 2012

The durable goods industrial production index was 110.4 in January 2015. In seven of the last eight months the index has been above 110.0. The index is at all-time highs and about 10% of peak levels before the financial collapse in 2008. January was the 24th consecutive month that the index set a record high for the given month. The month-over-month rate of growth was 7.2%, which is the fastest rate of growth since July 2012. The annual rate of growth remained is at 5.5%, which is the fastest rate of annual growth since May 2013. In January, my forecast for durable goods industrial production forecast was too low by 0.4%. 

The best leading indicators for durable goods production are housing permits, capital goods new orders, and consumer durable goods spending. Housing permits may have bottomed and are poised for accelerating growth. Capital goods new orders continue to grow at a strong rate but the most recent data has shown some softening. Durable goods spending is still growing at a relatively strong rate and above its historical average. 

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.

Accelerating Growth: aerospace; appliances; automotive; construction materials; custom processors; durable goods; electronics/computers/telecommunications; food/beverage; forming/fabricating (non-auto); furniture manufacturing; industrial motors/hydraulics/mechanical components; machinery/equipment; medical; military; oil/gas-field/mining machinery; off-road/construction machinery; petrochemical processors; plastic/rubber products; power generation; primary metals; textiles/clothing/leather goods; wood/paper products

Decelerating Growth: HVAC; metalcutting job shops; printing; pumps/valves/plumbing products; ship building

Accelerating Contraction: none

Decelerating Contraction: hardware