Growth in Durable Goods Production Remains Positive

While the index dropped in July, it still increased 1.0% compared with one year ago, extending its growth streak to 32 months.
 

In July, the index for production of durable goods was at 104.7, which was its lowest level since last July. It hit that low point after reaching its highest level ever last month. While the index dropped in July, it still increased 1.0% compared with one year ago, extending its growth streak to 32 months. However, the growth rate has slowed in recent months, falling below the historical average for the last six months.

The annual rate of growth, which is easier to correlate with other data points, decelerated to 2.7%, down from a peak growth rate of 3.5% in February. July’s growth rate was the slowest since June 2018. The annual rate of growth is likely to decelerate even more as the month-over-month rate of growth has been relatively weak the last six months. Further, the key leading indicator of production – durable goods new orders – is indicating slower growth in industrial production.

We track industrial production and its leading indicators for a number of industries.

Accelerating Growth: aerospace, medical, military, off-road/construction machinery, pumps/valves/plumbing products, ship/boat building

Decelerating Growth: automotive, construction materials, durable goods, electronics/computers/telecommunications, food/beverage, forming/fabricating (non-auto), hardware, industrial motors/hydraulics/mechanical components, machinery/equipment, metalcutting job shops, oil/gas-field/mining machinery, petrochemical processors, power generation, primary metals

Accelerating Contraction: appliances, custom processors, furniture, HVAC, plastics/rubber products, printing, textiles/clothing/leather goods, wood/paper products

Decelerating Contraction:

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