The Latest on Industrial Production 

By at 15 February, 2018, 9:33 pm

by Raymond J. Keating-

Industrial production – the output of the nation’s industrial sectors, i.e., manufacturing, mining and utilities – stalled in January (actually declining by 0.1 percent), according to the latest report from the Federal Reserve.

Given that one month does not make a trend, and that the fourth quarter of 2017 experienced strong growth in industrial production, we shouldn’t get too hung up on the topline January number.

And compared to a year earlier, the news is quite good on industrial production. Total industrial production in January 2018 was up by 3.7 percent versus January 2017, with mining up 8.8 percent and utilities output by 10.8 percent.

However, manufacturing production was up by 1.8 percent – far from strong. In fact, manufacturing output has been sluggish for more than five years now.

And the story on manufacturing output has been less-than-stellar over the past three months now. The fact that manufacturing production came in flat in January – following on also being flat at 0 percent in December and only 0.2 percent growth in November – warrants watching.

Fortunately, the policy environment has improved for the industrial sector, namely via business tax reform (including lower tax rates and expensing) and regulatory restraint from the White House and Congress, which improve the foundation for entrepreneurship, business investment, innovation and production looking ahead.


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.


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