February 2014 Economic Indicators
Melanie Garza - Director of Operations
Industrial Production Climbs to All Time High
Industrial Production has surpassed its previous record set in December 2007. According to the Board of Governors of the Federal Reserve System, Industrial Production rose in the United States for a fifth consecutive month in December. The December Index came in at 101.8 and closing the fourth quarter with 6.8% growth. At year’s end, Industrial Production grew 3.7% over 2012 with increases seen across many industries.
All major market segments with the exception of business equipment have climbed for five consecutive months. The production of Construction Materials grew the most in 2013, at 4.4% over the previous year and 0.4% in December. Final Production grew 0.2% in December and 3.1% over 2012; Consumer Goods rose another 0.5%, and gained 3.6% over the previous year. Nonindustrial Supplies rose 0.3% and finished the year 3.8% higher than 2012, and Materials grew .4% in December and a total of 4.2% more than 2012. Business Equipment posted a 1.8% gain over 2012; however, the segment shrunk in November and December.
Capital Equipment Orders Climb
As corporate profits and capacity utilization rates rise, analysts expect investments in capital equipment to continue to increase in 2014. As a whole, new orders for machinery grew 1.3% in December and finished the year 7.9% higher than 2012. Overall durable goods orders fell 4.2% in December.
Despite a 4.9% drop in December, new orders for industrial machinery surged 17.9% over the previous year. In November, the segment grew 6.2%. Material handling equipment orders spiked in the fourth quarter showing 18.3% gain in October, -3.7% in November and 5.8% growth in December; with an 8.2% growth rate in 2013, over 2012. Metal working equipment orders dropped 4.9% in December, but reported a strong 2013 growth rate of 12.2%, compared to 2012. Power equipment including generators and turbines had a relatively flat year in 2013, just 3.3% higher than 2012. The 4th quarter was hard on equipment, as orders dropped 10.5% for the period.
Questions? Please contact Melanie Garza at mgarza@teamCOACT.com