November 2018 Industrial Production Improved Marginally But Rolling Averages Declined

The headlines say seasonally adjusted Industrial Production (IP) improved month-over-month. Our analysis shows the three month rolling average again declined.

Analyst Opinion of Industrial Production

There was downward revision to last month's data. The best way to view this is the 3 month rolling averages which marginally declined. Industrial production remains in a long term upward trend.

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

 

  • Headline seasonally adjusted Industrial Production (IP) was up 0.6 % month-over-month and up 3.9 % year-over-year (YoY was published as 4.1 % last month).
  • Econintersect's analysis using the unadjusted data is that IP growth accelerated 0.1 % month-over-month, and is up 3.8 % year-over-year.
  • The unadjusted 3 month rolling average year-over-year rate of growth decelerated 0.6 % from last month, and is up 4.4 % year-over-year.
  • The market was expecting (from Econoday):
Headline Seasonally Adjusted Consensus Range Consensus Actual
IP (month over month change) +0.1 % to +0.5 % +0.3 % +0.6 %
IP Subindex Manufacturing (month over month change) +0.1 % to +0.4 % +0.3 % +0.0 %
Capacity Utilization 78.2 % to 78.8 % 78.5 % 78.5 %

IP headline index has three parts - manufacturing, mining and utilities - manufacturing was up 0.0 % this month (up 2.0 % year-over-year), mining up 1.7 % (up 13.2 % year-over-year), and utilities were up 3.3 % (up 4.3 % 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.

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