March 2018 Industrial Production Improvement Trend Continues

The headlines say seasonally adjusted Industrial Production (IP) improved month-over-month. Our analysis agrees.

Analyst Opinion of Industrial Production

There was insignificant revision to the existing data over the last 6 months. The best way to view this is the 3 month rolling averages which improved. Industrial production is in a long term upward trend.

Manufacturing improved this month.

Manufacturing employment rate of growth is accelerating year-over-year.

Headline seasonally adjusted Industrial Production (IP) was up 0.5 % month-over-month and up 4.3 % year-over-year.

Econintersect‘s analysis using the unadjusted data is that IP growth decelerated 0.3 % month-over-month, and is up 4.3 % year-over-year.

The unadjusted year-over-year rate of growth accelerated 0.4 % from last month using a three month rolling average, and is up 4.1 % year-over-year.

The market was expecting (from Bloomberg / Econoday):

Headline Seasonally Adjusted Consensus Range Consensus Actual IP (month over month change) 0.2 % to 0.7 % +0.4 % +0.5 % IP Subindex Manufacturing (month over month change) 0.0 % to 0.6 % +0.2 % +0.1 % Capacity Utilization 77.8 % to 78.3 % 78.0 % 78.0 %

IP headline index has three parts – manufacturing, mining and utilities – manufacturing was up 0.1 % this month (up 3.0 % year-over-year), mining up 1.0 % (up 10.8 % year-over-year), and utilities were up 3.0 % (up 5.3 % year-over-year). Note that utilities are 10.8 % of the industrial production index, whilst mining also is 10.8 %.

Comparing Seasonally Adjusted Year-over-Year Change of the Industrial Production Index (blue line) with Components Manufacturing (red line), Utilities (green line), and Mining (orange line)

Unadjusted Industrial Production year-over-year growth for 2 years has been near or below zero – it is currently trending up and in expansion.