INSIGHTS AND RESOURCES
Chart of the day: Industrial production hits record
REAL ECONOMY BLOG | May 17, 2022
Authored by RSM US LLP
Industrial production set another record in April, defying recession concerns in equity and fixed-income markets. The Federal Reserve’s index for industrial production volume rose by 0.8%, the fourth consecutive month of strong expansion, the report showed.
All major industries posted gains, a sign of continuing improvement in the domestic supply of industrial products.
Utilities led the increases, rising by 2.4% on the month, while mining and manufacturing rose by 1.6% and by 0.8%, respectively.
Production of business equipment—a proxy for private investment demand—grew significantly for the third straight month. April’s data registered a 1.1% increase, following a 1.4% gain in March and a 1.9% gain in February.
The effect of global supply chain bottlenecks and geopolitical tensions stood out as gains were driven largely by energy components, up by 1.8% on aggregate. Those components include energy goods, oil and gas dwelling, fuels and primary energy.
The lockdown in China has caused a substantial slowdown in auto production, leaving more room for growth in U.S. automobile production, which was up by 3.9% on the month.
Capacity utilization, which feeds into our RSM US Supply Chain Index, continued to improve to 79% in April from 78.2% previously. The operating rate for manufacturing rose by 0.6 percentage points to 79.2%, the highest since 2007 and above the long-run average by 1.1 percentage points. The operating rates for mining and utilities were also above their long-run averages in April.
While overall demand is slowing down, the shortage of global industrial supplies because of trade constraints is giving domestic producers more opportunities to increase production. With energy prices spiking again in May, we expect energy production to grow further.
Call us at +1 213.873.1700, email us at email@example.com or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Tuan Nguyen and originally appeared on 2022-05-17.
2022 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.
Subscribe to receive important updates from our Insights and Resources.