Economic News Blog
Posted by: Steven Kline, Jr. 22. January 2020

Production Growth Continues Trend for Fourth Month

In December, the Index for production of durable goods was 106.0, which was the third lowest level for the index in 2019. Compared with one year ago, the index contracted 1.0%, which was the fourth straight month of contraction.

The annual rate of change, which is easier to correlate with other data points, grew 0.7% this month. However, the annual rate of growth decelerated for the 10th​​​​-straight month. December’s growth rate was the slowest since June 2017, and it is likely to decelerate even more, as the month-over-month rate of growth has been relatively weak the last nine months. Further, the key leading indicator of production – durable goods new orders – is indicating slower growth in industrial production.

We track industrial production and its leading indicators for a number of industries.

Accelerating Growth: aerospace, electronics/computers, military, ship/boat building

Decelerating Growth: construction materials, durable goods, forming/fabricating (non-auto), industrial motors/hydraulics/mechanical components, medical, off-road/construction machinery, oil/gas-field/mining machinery, power generation, pumps/valves/plumbing products

Accelerating Contraction: appliances, automotive, custom processors, hardware, HVAC, machinery/equipment, metalcutting job shops, petrochemical processors, plastic/rubber products, primary metals, textiles/clothing/leather goods

Decelerating Contraction: food/beverage processing, furniture, printing, wood/paper products

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