INDUSTRIAL PRODUCTION DATA: Positive Signs for Manufacturing and Mining in 2017
By SBE Council at 17 March, 2017, 8:31 am
by Raymond J. Keating-
According to the latest industrial production numbers released by the Federal Reserve on March 17, while production in the overall industrial sector was flat for February, both manufacturing and mining output rose solidly.
The big negative in industrial production came on the utilities front – with output there dropping by 5.7 percent (down by 5.7 percent in January as well) – as warm weather continued to reduce heating demand.
Beyond that, though, mining rose by a robust 2.7 percent in February, after a rise of 2.2 percent in January. That’s good news.
And manufacturing output rose by 0.5 percent. This followed on a 0.5 percent increase in January as well. This is a welcome step up in manufacturing, as production growth has been abysmal for four years now, growing by 0.9 percent in 2013, 1.3 percent in 2014, 0.8 percent in 2016 and only 0.1 percent last year.
Also, keep in mind that manufacturing output in February (105.4) remained below its peak (108.5) set in December 2007. In fact, we’ve seen no growth in manufacturing output over the past decade. That’s stunning and rather frightening.
Performance in manufacturing output over the first two months of 2017 turned out to be the best back-to-back record since late 2012. The key is sustainability. It certainly has not been there over the past ten years.
And keep in mind that manufacturing in the U.S. very much is about small business, as 75 percent of manufacturers have less than 20 workers and 94 percent have less than 100 workers.
Looking ahead, if we get real pro-growth, pro-investment tax and regulatory reform and relief then manufacturing, and industrial production overall, will experience sustained, strong growth.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.
Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP: The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.