US Industrial Production Shows Signs Of Stabilization

equipment-leasingManufacturers in the United States produced more appliances, construction supplies, and clothing in the month of September, which indicates that one of the mainstays of the earliest part of the economic expansion is finally regaining some of its lost stability.

New Results

The output in mines, factories, and utilities had dropped 1.4% in August, the steepest dropoff since March of 2009, but rose 0.4% in September, beating the median forecast that was offered by a number of economist surveyed by Bloomberg.  Other positive signs include little or no inflation outside of fuel costs and homebuilder confidence climbing to a six year high.

The gains recorded in retail sales across the country indicate a marked jump in consumer spending that may end up countering a pullback in business investment. The economy is regaining some of the momentum that was lost in the spring, providing a much needed stable financial platform for businesses who are looking to invest or expand their operations.

A survey of more than 85 economist predicted that production would rise 0.2%. Industrial output grew 2.8% throughout the year through September. Manufacturing climbed 0.2% after falling 0.9% in August. Factories account for about 12% of the overall economy.  The output of consumer goods was changed little with a slowing in auto assemblies being offset by pickups in the manufacturing of appliances and clothing.

Other positive signs include reports from the housing sector, lower jobless numbers, a much improved consumer sentiment, and more consumer spending. The pace of growth does continue to be a concern, coupled with economic uncertainty overseas. Mining production, including oil drilling, increased nearly 1% after falling 1/6% the previous month, while utility output gained 1.5% after a 4.3% drop in August.

Future Projections

The output of business equipment also rebounded in September, coming back 0.8% (almost recovering the 0.9 lost in August). Machinery output climbed 0.4% after falling 0.6%. Construction supplies showed a solid 1.3% gain.

Homebuilder confidence continues to climb for the sixth month in a row, a good sign that the real estate market may finally be coming back.  More than 770,000 homes were begun in September, the most new constructs since October of 2008.

Of course many variables are still in play, not the least of which is the upcoming presidential election, the results of which will no doubt have a marked effect on any number of markets, from production through housing. Solid indicators of improvement or decline will probably not be readily available until sometime in the first quarter of 2013.

LeaseQ is one of the leaders in equipment leasing companies in the United States.

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