Industrial Production Data Review

Despite claims that the freight recession is over, those of you who follow the public less-than-truckload (LTL) carriers note that most LTL outfits have been reporting declining year-over-year volumes for October and November (e.g., https://lnkd.in/gJ9Cf-VF). Continued soft volumes in the LTL space stem mostly from ongoing weakness in the industrial economy (e.g., manufacturing). In that regard, I wanted to share one industrial production series, focusing specifically on production of goods made by machine shops, turned products, and screws/nuts/bolts (https://lnkd.in/gnYJjMD8) that does a good job of capturing inflections in freight market cycles. One chart. Thoughts: •These industrial production data show seasonally adjusted physical unit output for this 4-digit industry. Crucially, the BEA estimates only 15% of the consumption of goods belonging to this industry are imported, suggesting an ongoing important role for domestic manufacturing (accounting for ~$70 billion in shipments each year: https://lnkd.in/g4tp2fr8). •As can be seen, during normal freight cycles, upticks of production in this sector correspond quite closely to the onset of bull market pricing cycles in late 2013/early 2014 and mid-2017. Equally, downturns in production correspond to bearish conditions. •The fact production didn’t start dropping till late Q3 2023 (about a year after the freight recession started) can be easily explained by the rampant raw material and labor shortages in 2021 and 2022 creating very large increases in order backlogs (https://lnkd.in/gB4iMH2j) that supported production even after new orders had cooled down. Implication: production by machine shops in the USA merits close monitoring as we move into 2025. An uptick of production would be another indicator that we are exiting the current limbo of flat freight volumes. As it appears this series has finally found its nadir, it will likely take a few more months for production to rise significantly (e.g., late Q1 2025). #supplychain #supplychainmanagement #freight #trucking #manufacturing 

As our President said yesterday: only what gets measured gets done . Let me share some insights from our DG GROW kitchen on how we observe and measure the #SingleMarketEconomy to build robust data for policy making. DG GROW is continuously working sourcing , processing and interpreting relevant information to better understand industrial trends and better anticipate potential risks or disruptions. Such data informs not only policy making but is relevant to planning and decisions for industry and other users. This summer, we’re making available two useful new tools: 1. 𝐒𝐂𝐀𝐍 𝐃𝐚𝐬𝐡𝐛𝐨𝐚𝐫𝐝 Powered by Eurostat COMEXT data, the SCAN Dashboard helps detect supply chain distress by identifying anomalous changes in import prices and quantities. Users can: - Examine all raw materials essential for Net Zero Techs (EV batteries, fuel cells, heat pumps, solar panels, wind turbines) and detect potential supply chain issues. - Select and analyse other products of interest. - View information in intuitive ‘quadrants’ with the top left indicating the highest distress. - Access detailed Product Charts on products showing import sources, price evolution, and more. Recent data reveals intriguing shifts in the EU's import patterns for solar panel materials. From February to April 2024, imports of gallium, molybdenum, boron, and copper decreased compared to 2021-2023, while prices rose. These materials, except gallium, are also vital for wind turbine technologies. The Dashboard indicates potential supply chain distress for these materials, proving invaluable for industry experts. 2. 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐚𝐥 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐨𝐧 𝐃𝐚𝐬𝐡𝐛𝐨𝐚𝐫𝐝 The Industrial Production Dashboard enables users to explore manufacturing output trends in major EU producer countries and key sectors (automotive, machinery, chemicals, fabricated metals, food) using Eurostat’s Industrial Production Index (IPI). This tool offers: - A clear view of the EU’s industrial performance through price-adjusted output. - Insights into production trends across various sectors and regions. - Intuitive clustering of countries for comparative analysis, displaying maximum and minimum scores per group. The latest data highlights a decline in automotive production in Germany, France and Italy, while Eastern Europe experiences a boom. The machinery sector remains stable overall, despite varying performances across countries, and the chemicals industry is showing signs of recovery. These new Dashboards are designed to support the monitoring of industrial activity and are complementary to our confidence indicators and producer price inflation analysis. SCAN Dashboard 👉 https://lnkd.in/eBMRSHa7 Industrial Production Dashboard 👉 https://lnkd.in/eTH5Mvji Confidence Indicator for ecosystems 👉 https://europa.eu/!whVqnv Decomposition of producer price inflation in the Euro area 👉 https://europa.eu/!dkVqTT

A Welcome Strong Month for Industrial Production Industrial production rose a healthy 0.6% in June, following an upwardly revised 0.9% gain in May. The manufacturing IP index rose 0.4% in June, after a 1% rise in May. The two-month gain brings manufacturing industrial production to its highest level since October 2022. While two months do not a trend make, the back-to-back gains are good news for a manufacturing sector that has mostly been moving sideways. The recent strength has been driven by consumer goods, where production was up 1% on the month and 2.8% from a year ago. This is a bit stronger than expected, given other measures that suggest gradually slowing consumer spending. A cautionary note: The strongest element of consumer IP in June was utilities production, buoyed by the heat wave that affected much of the country last month. But auto production was also very strong, and non-energy nondurables consumer goods production showed a solid gain. With the exception of construction, nonindustrial supplies output growth was also relatively healthy in June, rising 0.5%. Production of business equipment has been weaker, falling 0.4% in June and down 1.2% over the past year. The overall picture for manufacturing remains somewhat mixed. Employment in the sector has been flat, and the Institute for Supply Management's Purchasing Managers Index (PMI®) for manufacturing has been slightly in contraction territory in recent months. And a slowing economy may weigh on the sector going forward. Still, the June production numbers are welcome good news. #manufacturing #Industrialproduction #IP #consumergoods #motorvehicles

Industrial production jumped 0.9% in December, far exceeding expectations. November was revised up. Output in the aerospace industry rose 6.3% after resolving a work stoppage. Primary metals rose 1.7%, and high-tech #manufacturing rose 1.1% mainly on semiconductors. #Construction supplies posted gains of 0.9% despite higher mortgage rates due to post-hurricane rebuilding and a warmer-than-average December. Can this momentum carry into 2025? The ISM PMI's are pointing up on new orders and production, but #headwinds abound. Those include sluggish global demand, a strong US dollar weighing on exporters, and a slowdown in the pace of rate cuts.

After falling in three of the four prior months, manufacturing production grew 0.5% in July. Durable and nondurable goods production increased 0.8% and 0.1% in July, respectively. Since April 2022, when manufacturing production reached its highest level since the end of 2018, output in the sector has pulled back 1.3% on weaker global growth and ongoing geopolitical and economic uncertainties. The current forecast is for manufacturing production to decline 0.3% in 2023 but expand 1.0% in 2024.   At the same time, manufacturing capacity utilization rose from 77.5% in June to 77.8% in July. This figure has trended higher year to date, up from 77.1% in December, but it remains lower than the rates seen in March 2022 and April 2022 (79.9%), which was the highest since July 2000.   July’s report included mixed results for manufacturing production data. Sectors with increased output for the month included motor vehicles and parts (up 5.2%), textiles and products (up 3.1%), machinery (up 1.3%), other manufacturing (up 1.3%), petroleum and coal products (up 1.1%) and computer and electronic products (up 1.0%), among others.   At the other end of the spectrum, electrical equipment and appliances (down 1.7%), furniture and related products (down 1.2%), primary metals (down 1.2%), wood products (down 0.7%) and paper (down 0.7%) had the largest reductions in production in July.     There were five sectors with growth in manufacturing production over past 12 months: motor vehicles and parts (up 10.3%), petroleum and coal products (up 2.8%), computer and electronic products (up 2.4%), chemicals (up 1.4%) and aerospace and miscellaneous transportation equipment (up 1.1%).   Meanwhile, total industrial production rose 1.0% in July, rebounding from decreases in both May and June. Mining and utilities production increased 0.5% and 5.4% for the month, respectively. On a year-over-year basis, industrial production has decreased 0.2%. Total capacity utilization improved from 78.6% in June to 79.3% in July.  #mfg #manufacturing #production #capacity #economy #outlook https://lnkd.in/giXCfEWE

📈 March Industrial Output Review: Manufacturing on the Rise! Great news from the manufacturing sector this March! With a 0.5% increase, manufacturing output led the charge in the overall 0.4% rise in industrial production. 🚗 The motor vehicle sector stood out, rising by 3.1%. It's encouraging to see vehicle inventories adjusting, dropping from an 80 days' supply in February to 76 in March. This uptick is a clear indication of robust consumer demand, supported by a strong labor market. On an annual basis, motor vehicle output rose 7.3% from a year ago, surpassing the flat reading for overall industrial production. 🤖 On the tech front, the output for computer and electronic products saw a modest rise but with the burgeoning demand for generative AI, we can anticipate more growth in computer equipment manufacturing. It's exciting to see a nearly 7% rise in output from last year. 🏭 Despite some dips in areas like primary metals and machinery, the overall industrial sector remains promising. The resilience in motor vehicle production and the burgeoning tech manufacturing are pivotal in balancing the scales amidst other industry fluctuations. This dynamic underscores the importance of innovation and adaptability in driving industrial success. https://lnkd.in/d3-yRQD4 #KPMGIndustrialManufacturing #IndustrialManufacturing #IndustrialOutputReview #MotorVehicles

𝗧𝗵𝗲 𝗕𝗮𝗰𝗸𝗯𝗼𝗻𝗲 𝗼𝗳 𝗜𝗻𝗱𝗶𝗮’𝘀 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝗶𝗮𝗹 𝗚𝗿𝗼𝘄𝘁𝗵: 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝘁𝗵𝗲 𝗜𝗻𝗱𝗲𝘅 𝗼𝗳 𝗘𝗶𝗴𝗵𝘁 𝗖𝗼𝗿𝗲 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝗶𝗲𝘀 (𝗜𝗖𝗜) 🏭 Let us understand how India’s industrial performance is measured? The Index of Eight Core Industries (ICI) is a key economic indicator that tracks the eight pillars of India’s industrial infrastructure: ⚡Coal | Natural Gas | Crude Oil | Refinery Products | Fertilizers | Steel | Cement | Electricity | The "Index of Eight Core Industries" (ICI) is a subset of the "Index of Industrial Production" (IIP). These industries account for 40.27% of India's industrial output (IIP), making ICI a crucial tool for policy decisions, economic forecasting, and investment planning. 🔍 𝗪𝗵𝘆 𝗗𝗼𝗲𝘀 𝗜𝗖𝗜 𝗠𝗮𝘁𝘁𝗲𝗿? 📊 Early Economic Signal: Released a month before the IIP, it helps gauge industrial momentum. 🏗 Industrial Growth Benchmark: Reflects GDP trends, employment patterns, and infrastructure expansion. 💰 Investment & Policy Planning: Helps shape interest rates, sectoral policies, and business strategies. ⚙️ Energy & Infrastructure Development: Serves as a guide for the long-term planning in construction, power, and transportation. 🌍 Global Competitiveness: Impacts trade balance, cost of production, and India's global standing. 📊 𝗛𝗼𝘄 𝗶𝘀 𝘁𝗵𝗲 𝗜𝗖𝗜 𝗖𝗼𝗺𝗽𝘂𝘁𝗲𝗱? ✅ Base Year: 2011-12 (aligned with national income accounts). ✅ Formula: Laspeyres’ fixed-base formula, with each industry weighted by its economic contribution. ✅ Data Sources: Six government agencies ensure transparency and reliability. 📈 𝗧𝗿𝗲𝗻𝗱𝘀 & 𝗣𝗼𝗹𝗶𝗰𝘆 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀: 🔹 Growth in Core Sectors: Electricity, steel, and refinery output are rising, indicating industrial expansion and higher energy demand. 📌 National Electricity Plan (2022-32): Aims for >900 GW installed capacity by 2031-32. 📌 National Steel Policy (2017): Targets 160 kg per capita steel consumption by 2030-31. 🔸 Challenges in Crude Oil & Natural Gas: Weak performance here raises energy security concerns and increases import dependency. 🔹 Proactive Interventions: ✅ PLI schemes and viability gap funding (VGF) are pushing clean/green energy and infrastructure growth. 🚀 𝗥𝗲𝗰𝗲𝗻𝘁 (𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟮𝟰) 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲: ✅ ICI grew 4.0% YoY, signalling strong industrial activity. 📈 Growth in Coal, Electricity, Steel, Cement, Refinery Products, Fertilizers, and Crude Oil. 📉 Natural Gas was the only sector to decline. 𝗘. 𝗜𝗻𝗳𝗲𝗿𝗲𝗻𝗰𝗲: The ICI serves as a barometer for India's industrial strength. A 4% growth in December 2024 points to a positive economic outlook. However, sustaining this momentum will require strategic investments in infrastructure, clean energy, and core industries. 📢 Your thoughts on India’s industrial growth? Let’s discuss! AI Assisted.