Indicators for industrial production, capacity utilization, orders for capital goods, and manufacturing employment paint a relatively positive picture. Manufacturing output increased by 1.1% in November, the largest increase since February.
The Federal Reserve Board’s index for manufacturing output surpassed its pre-recession peak in October. The gains were widespread, with 22 of the 25 industry groups showing an increase in production. Motor vehicle production bounced back from three straight months of decline, rising by 5.1%.
Output in the machinery, wood products, and miscellaneous manufacturing industries also increased by more than 1%. The index of manufacturing output can be volatile on a month-to-month basis and thus we also look at the three-month moving average; this measure for September, October, and November was up a solid 4.5% when compared with the same three-month period the previous year. The three-month moving average indicates that manufacturing sector growth was on a solid footing as we headed into the New Year.
The Institute for Supply Management’s Purchasing Managers Index (PMI) edged down very slightly from 59 in October to 58.7 in November. It thus remains a relatively high level.
Article provided by Don Norman, Senior Economist at MAPI.