Several new bits of data suggest the manufacturing sector will continue on its bumpy road to recovery. First the Federal Reserve data released on Tuesday said industrial production increased by 0.8% from October to November. In addition, manufacturing production increased by 1.1% and one key economic indicator we like to look at involves upticks in the mining industry which increased output by 2.1%. The PPI for finished goods increased 2.4% from November of last year, according to the Wall Street Journal.
But the economic upticks do not appear to extend to every region. The New York region on the other hand, reported its smallest expansion in the past five months declining 2.6 pounds from its 23.5 reading in November (readings above zero indicate economic expansion). Though the headlines have captured the essence of the new data, the trend lines still appear somewhat disturbing from our vantage point.
The Institute of Supply Management’s (ISM) report for November, though positive, suggested a few areas in which the data had moved in a negative direction. For example, though the PMI registered at a growth number of 53.6 for November, PMI had been 55.7 for October. Production also appeared to slow from October moving from 63.3 to 59.9. Again, the data remains in positive territory but does not suggest slow and steady growth.
In addition to end of year budgeting and planning for which we see many manufacturers conducting right now, the economic data will drive the Fed’s decision on when to begin raising interest rates. Watch this space for our metal price predictions in early January!