Economic News Blog
Posted by: Steven Kline, Jr. 15. December 2014

Production Growth Remains Strong

According to the Federal Reserve, the durable goods industrial production index was 112.1 in November 2014. In each of the last three months the index has been above 112.0, which is just shy of the all time high of 113.3 set in June of this year. And, November was the 22nd consecutive month that the index set a record high for the given month. The month-over-month rate of growth was 5.6%. The annual rate of growth remained at 5.0%. 

In November, my fore durable goods industrial production forecast was too low by just 0.1%. My forecast calls for the rate of growth in durable goods production to remain above 110.0 through June 2015 with a slight acceleration in the rate of growth to 5.5% in early 2015. By the summer of 2015, I expect the rate of growth to have decelerated to 4.1%.

The best leading indicators for durable goods production are housing permits, capital goods new orders, and consumer durable goods spending. Housing permits are growing at a decent rate. The rate of growth in housing permits has slowed significantly but may bottom out soon. Capital goods new orders continue to grow at a strong rate. Consumer 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: aerospacecustom processorselectronics/computers/telecommunicationsfood/beveragefurniture manufacturingmachinery/equipmentmedicalmilitaryoff-road/construction machinerypetrochemical processorsplastic/rubber productsprimary metalsprintingtextiles/clothing/leather goods

Decelerating Growth: appliancesautomotiveconstruction materialsdurable goodsforming/fabricating (non-auto)HVACindustrial motors/hydraulics/mechanical componentsmetalcutting job shopsoil/gas-field/mining machinerypower generationpumps/valves/plumbing productsship buildingwood/paper products

Accelerating Contraction: hardware

Decelerating Contraction: none

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