Manufacturing Output…is the sun really shining again?

Industrial production rose 0.6% in June on May, manufacturing rose 0.4%, mining has risen for two consecutive months, machinery rose 1.1% (up 3.8% over the last 3 months) and motor vehicles and parts rose 5.9% (after a 4.3% fall in May).

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If we look at smoothed data over rolling 6 month periods we also see an uptick in output, the first noticeable rise for some time.

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If we look outside of shorter term data we still see a very weak picture: annual growth rates, based on smoothed data, is incredibly weak.

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Even the short term rebound is nothing to write about and we would need to see sustained growth above current levels to be positive about its implications for the economy:

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Manufacturing remains in a long term slump,more so when we adjust for population growth:

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And more detailed annual data still shows an economy overly reliant on the auto sector, and a debt financed one at that:

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There are of course positive aspects to the data.   Growth is indeed slow but there is little to suggest that manufacturing is going to hell in a hand basket.  Machinery & mining are rebounding from quite significant declines. 

On the other hand, growth is slow and there is little to suggest the type of recovery one would draw optimism from with respect to the wider economy.   Slow growth means weak employment prospects in this sector and weak capital expenditure fundamentals.  

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