Manufacturing Output Insights

As the large investments in computer and electronic product manufacturing (NAICS 334) begin to come online in the USA (e.g., TSMC’s facility in Arizona), one question is how do we measure such activity? As many of you who follow me know, I tend to gravitate towards using industrial production data from the Federal Reserve Board to measure manufacturing output. However, this is one exception, as industrial production data for hi-tech products measure the amount of computing power produced in US plants (see https://lnkd.in/gn4sFNn that mentions use of “deflated shipments” and “Fisher quantity indexes” to measure output in many subsectors of this industry. Instead, I prefer to use data on value of shipments from the Census Bureau to understand output trends in this sector. The chart below, permanent link at https://lnkd.in/gVNpqmQE demonstrates why. Thoughts: •Looking at the industrial production data (black, right Y-axis), output in 2025 is 20% above 2017 levels, and 2017’s output was 5x what it was in the late 1990s. This makes it look like computer & electronic manufacturing in the USA has been growing like a weed over the past 30 years. •In stark contrast, the value of shipments data (red, left y-axis) shows that 2025 value of shipments are around $30 billion a month. While this is a nice increase from before COVID, output back in 2007 was $33 billion a month. Peak output was $44 billion a month in 2000 before the dot com crash. •One thing the value of shipment data make clear was that the Global Financial Crisis was the event that really hurt domestic production, as we didn’t see a significant rebound after that event. Implication: for hi-tech products, focusing on value of shipments tends to be more informative than industrial production, especially for longer-term comparisons. It’s encouraging to see the value of shipments data trending upwards. My hope is this continues (the AI computing boom should provide tailwinds to demand for the foreseeable future, though we will need to see whether tariffs provide a countervailing headwind to some degree). #supplychain #economics #manufacturing #markets #shipsandshipping #freight

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

Texas Sounds the Alarm for U.S. Manufacturing Texas factory activity technically grew in April, but the underlying data is flashing clear warning signs for the broader U.S. economy. The Dallas Fed’s latest Texas Manufacturing Outlook Survey showed the production index holding at a modest 5.1. On the surface, that suggests stability. But under the surface, the story is much different. New orders plunged to negative 20.0, shipments turned negative for the first time this year, and the general business activity index fell to negative 35.8, its worst reading since May 2020. Company outlooks also dropped to a postpandemic low, and uncertainty spiked sharply. Tariffs were a major contributor. Nearly 60 percent of surveyed manufacturers said higher tariffs would hurt their business this year. Many are already struggling to pass costs along to customers, with some reporting canceled shipments, delayed builds, and growing difficulty managing supply chains. Even companies with mostly domestic inputs reported feeling the pullback in demand. Price pressures are rising again as input costs jumped to the highest level since mid-2022. Finished goods prices moved sharply higher too. Wages remained relatively steady, but the broader pattern suggests companies may soon face a choice between protecting margins or protecting volume in a market where consumers are already fatigued. Texas accounts for about 10 percent of U.S. manufacturing output, and historically its trends often lead the broader industrial economy. When new orders collapse, when companies hesitate to invest, and when inflation pressures mount simultaneously, it sets the stage for broader weakness ahead. This is not an isolated regional story. It is an early signal that tighter financial conditions, trade disruptions, and cumulative inflation could be converging into a new phase of the slowdown. For the economy overall, Texas may be showing the early dynamics of a stagflation-lite environment, with slowing growth, re-accelerating cost pressures, and growing uncertainty about how much pricing power businesses really have left. What were once hypothetical risks are now beginning to show up in real-time survey data. At Havas Edge, we track these shifts closely because consumer psychology often turns before headline indicators do. Brands that understand the signals early can adjust media strategies, value propositions, and messaging to match the new environment. Those who wait until the slowdown is official often lose ground they cannot easily regain. #economy #manufacturing #inflation

Manufacturing production edged up in December. But the sector's slump continues. The nation's manufacturing industrial output rose 0.6% in December, according to preliminary estimates from the US Federal Reserve Board, following a 0.4% rise in November. Industrial production for all sectors rose 0.9%. Manufacturing industry production has moved sideways for the past two years, following a brief post-pandemic pickup. New orders for durable goods also continue to be weak, and manufacturing employment has fallen modestly in recent months. The forward-looking ISM purchasing managers index shows ongoing contraction in reported activity, although less widespread than in the recent past. Manufacturing production in December was exactly the same as in December of last year. Over the year, segments that saw significant contraction include autos, aerospace, apparel, and plastic and rubber products. Sub-sectors seeing significant year-over-year expansion include computers and electronic products, electrical equipment, printing, and chemical production. Energy utilities also saw a significant rise over the year. We are at an interesting turning point in two respects: First, the large current investments in chip fabrication plants and computer server installations may fuel increased output in electronics as these come on line over the next few years. Second, the incoming Trump administration plans large and widespread tariff increases, with the goal of forcing reshoring of manufacturing from abroad. The verdict on this remains to be seen, although past experience suggests that any manufacturing job gains will be modest and "bought" at a high price for consumers. #manufacturing #industrialproduction #computerchips #tariffs

Some thoughtful reading to close the week: Signs of resilience - and opportunity - in Eurozone manufacturing The latest HCOB Eurozone Manufacturing PMI rose to 48.7 in April 2025, reaching a 27-month high. After nearly three years of contraction, manufacturing activity is showing early signs of recovery - confounding expectations for a further decline. Even more notably, the index measuring output jumped to 51.2, its highest in almost three years. At 9altitudes, the trends we observe in the market mirror closely what we hear every day in our customer dialogues across Europe and Latin America. While uncertainty remains, companies are demonstrating a strong will to move forward - retooling operations, accelerating innovation, and embedding resilience and sustianability into the heart of their businesses. Despite external challenges, including new tariffs and geopolitical tensions, we see that manufacturers are increasing production, leveraging AI to drive meaningful productivity gains, redesigning supply chains for greater adaptability, and placing sustainability at the core of their long-term strategies. Our customers are not passively waiting for stability - they are shaping it. This spirit resonates deeply with our vision at 9altitudes Through our digital common thread, we help organizations connect technology, people, and strategy into a single, cohesive force - turning ambition into impact, and challenge into competitive advantage. I am proud to lead 800 talented professionals who are working relentlessly to support those ready to capture this moment. Not simply to rebuild - but to define the next industrial cycle. Wishing everyone a productive and inspiring weekend! #9altitudes #DigitalTransformation #AI #SupplyChainResilience #Sustainability #ManufacturingExcellence #Leadership #FutureOfIndustry https://lnkd.in/dQ2E7T_B

🏭 Industrial production grew 0.5% in January after December and November data were revised lower. Production hit the highest level since September 2022, beating expectations. Compared to a year ago, industrial production is up 2%, the largest jump in more than two years. Below-average temperatures in much of the South and Midwest in January spurred increased energy usage; record-breaking cold and snow hit the Gulf Coast. The index for energy materials hit the highest level on record going back to the 1950s. Utilities production jumped 7.2% last month, the largest increase since March 2017. It is not just cold weather effects. Energy needs by businesses are increasing, especially as businesses pivot to adopt generative AI. Mining production fell 1.2% in January but was still 3.4% higher than a year ago. Oil and gas extraction, along with coal mining, fell while metal ore mining gained. Gold prices keep hitting new records. Drilling oil and gas wells fell to the lowest level since September 2021. A ban on liquified natural gas exports made by the former administration exactly one year ago was lifted by the new administration on Inauguration Day. Natural gas liquid extraction fell in the month, but the overall trend has been growing for decades. Manufacturing output slumped 0.1% in January as both durable and nondurable goods production underperformed. Vehicle production fell to the lowest level in three years while computers and electronics production helped offset some of that drop. A resumption of work at a major aerospace producer in November took two months to show up in aerospace transportation production data, which reached the highest level since August 2024. Food manufacturing was lower, which showed up in higher food inflation readings in January; the bird flu has been wreaking havoc on egg prices. Higher-for-longer mortgage rates have frozen the housing market and as a consequence, demand for furniture and appliances. Furniture manufacturing remains near the lows last seen in the early 1980s (excluding Covid-era plant shutdowns), when mortgage rates were in the double digits. Capacity utilization rose 1.2% due entirely to utilities. Manufacturing and mining both declined. A strong dollar and sluggish growth abroad spell less demand for US-made goods for the year. Add on tariffs and retaliatory measures by our trading partners, and the outlook is unfavorable. The silver lining is that higher-end goods such as chips manufacturing will provide a tailwind along with the energy needs due to power-hungry data centers. Trade uncertainty weighs heavily on the sector. #manufacturing #industrialpolicy #utilities #tariffs Read more: https://lnkd.in/gHYfpbuT

China: The Indispensable Center of Global Manufacturing In 2024, China reinforced its role as the backbone of global manufacturing, contributing approximately 27% of the world’s total manufacturing value added. This commanding position is supported by a staggering industrial value-added output of 40.5 trillion yuan (roughly $5.65 trillion). Looking back to 2023, China’s manufacturing sector generated $4.8 trillion in added value, accounting for 28.9% of the global total—over 11 percentage points ahead of the United States (17.2%). Japan and Germany followed with 5.1% each, while South Korea and India stood at 2.8%. Key Drivers Behind China’s Manufacturing Dominance: - Integrated Supply Chains: China’s deeply interconnected and vertically integrated supply networks have enhanced production efficiency and resilience. - Strategic Industrial Policies: Initiatives like Made in China 2025 have propelled the country up the value chain, emphasizing high-tech sectors such as high-speed rail, EVs, and renewable energy. - Infrastructure Investment: World-class investments in logistics, ports, highways, and industrial parks continue to support large-scale production and seamless global distribution. - Technological Advancement: Backed by massive R&D investment, China is leading in AI, green tech, and smart manufacturing. Across the country, AI-powered factory robots are revolutionizing production—lowering costs, improving quality, and giving China a pricing edge even in the face of high tariffs. - Skilled Workforce: A broad and increasingly skilled labor force supports both high-end innovation and cost-effective manufacturing. - Global Market Penetration: Chinese manufacturers dominate in electronics, construction equipment, green tech, and beyond—extending their reach to markets across the globe. - While countries like Ireland, Cambodia, Vietnam, South Korea, and Thailand boast manufacturing sectors that make up over 25% of their GDP, none match China’s scale, efficiency, and technological depth. As of 2024, China remains not just the world’s manufacturing leader—it is the strategic nucleus of global industrial output. With ongoing investment in innovation, technology, and infrastructure, China is not only sustaining its dominance—it’s shaping the future of manufacturing worldwide. https://lnkd.in/dPQdV5eg