Tuesday, November 3, 2009

Industrial Production Shows Big Gains

Better-than-expected gain suggests that economic growth in the third quarter could be stronger than anticipated

Industrial production rose 0.7 percent in September after an upwardly revised gain of 1.2 percent in August, according to The Federal Reserve. For the third quarter as a whole, output advanced at an annual rate of 5.2 percent, the first quarterly gain since the first quarter of 2008 and the largest gain since the first quarter of 2005.

Production in manufacturing increased 0.9 percent in September, and the index excluding motor vehicles and parts rose 0.5 percent.

Led by a surge in steel production, primary metals jumped at an annual rate of 87 percent in the third quarter; nevertheless, the index in September was 28 percent below its year-earlier level. Elsewhere in durables, the output of computer and electronic products rose 0.5 percent in September, and the indexes for wood products; fabricated metal products; and electrical equipment, appliances, and components edged up, the output of nonmetallic mineral products fell 0.7 percent, and the indexes for machinery and for furniture and related products each declined about 1 percent.

The production of nondurables moved up 0.8 percent, with gains widespread across its components. The indexes for textile and product mills, for apparel and leather, and for petroleum and coal products all increased at least 1 percent. In addition, the output of chemicals gained 0.8 percent, and the output of food, beverage, and tobacco products increased 0.5 percent. However, the indexes for paper, for printing and related support activities, and for plastics and rubber products all declined modestly.

In September, the capacity utilization rate for total industry increased to 70.5 percent, a level 10.4 percentage points below its average for 1972 through 2008.

Larson Notes: So where does that put you. If you can sell to the steel industry go for it. I see this area of manufacturing continuing to grow as general building, infrastructure, industry and rail need more steel to build things. Put that together with government cash for green appliance program (which I expect them to put into place) and you have a growing robust steel sector. And while you’re at it, marketing quickly into appliance companies would be a good thing. Even a short burst of government stimulus money will have them in a purchasing mode. Time is short but if you work fast, very fast, there might be some low handing plumbs to be gotten.

Howard Larson
Larson & Associates
Target Marketing & Telesales Professionals for new account acquisition
Making good businesses great and great businesses even better


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