Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Industrial Production Rose 0.2% in January
Posted Under: Data Watch • Industrial Production - Cap Utilization
Supporting Image for Blog Post

 
Implications: We hate to sound like a broken record, but today's news on the industrial sector in January was another Plow Horse report. Although growth in industrial production came in slightly slower than the consensus expected 0.4%, the underlying details of the report continue to show bright spots. Industrial production is divided into three major parts: manufacturing (which includes autos), utilities, and mining (which includes oil and gas production activities). The least volatile portion of the whole report is manufacturing excluding autos, which rose 0.2% in January – the twelfth consecutive monthly gain – and is up 5.1% from a year ago. The gain in manufacturing ex-autos was spurred by a 1.2% increase in production of high-tech equipment. The rest of the report was scattershot. Autos posted their second straight monthly decline, falling -0.5%, but are still up 13.3% in the past year. Utilities posted a healthy gain of 2.2%, as temperatures dipped in January, boosting demand for heating after an unusually mild December. Mining dropped 1% as a 10% decline in oil and gas well drilling more than offset gains in most other mining activities. We expect continued growth in industrial production in the year ahead despite any downward pressure from the energy sector. Companies are sitting on huge cash reserves and profits are at record highs. In addition, at 79.4%, capacity utilization remains higher than the average of 78.6% in the past twenty years, so further gains in production will push capacity use higher, giving companies an incentive to build out plant and equipment. In other recent manufacturing news, the Empire State index, a measure of manufacturing sentiment in New York, came in at a moderate 7.8 in February versus 10.0 in January.

Click here for PDF version
Posted on Wednesday, February 18, 2015 @ 12:46 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.