Industrial Production Uptick Likely In 2017
U.S. industrial production is expected to move into a recovery trend during the closing months of 2016, reports economic research and consulting firm ITR Economics in the October 2016 edition of its ITR Advisor. Average U.S. total industrial production was down 1.3 percent for the 12 months ending in September, but indicators point toward improvements in the sector through mid-2017.
The U.S. Purchasing Managers Index (PMI), which typically leads industrial production by nine to 14 months, has been climbing since December 2015 and indicating expansion in the U.S. economy’s manufacturing sector. U.S. manufacturing is up 0.4 percent despite U.S. Fabricated Metal Products Production and U.S. Light Vehicle Retail Sales both declining. However, for the 12 months ending in September, U.S. Motor Vehicle Parts Production is up 7.1 percent and ITR expects Manufacturing Production to improve into early 2018.
Also factoring into the country’s industrial production performance are U.S. Mining Production and U.S. Electric and Gas Utilities Production, which are at the low points of their business cycle. The sectors should benefit from rising oil prices, which are forecast to increase into 2017.
ITR expects the overall U.S. economy to grow through 2017, noting recoveries not only in the industrial sector but also business-to-business activity.
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