The Rust Belt Came Back Strong in 2011; Midwest Manufacturing Is At the Forefront of the Recovery
The Chicago Federal Reserve reported today that its Midwest Manufacturing Index (CFMMI) increased 1.7% in December, to a seasonally adjusted level of 87.4 (2007 = 100). Here are some highlights of manufacturing activity in the 7th Federal Reserve district that covers Illinois, Indiana, Iowa, Michigan, and Wisconsin:
1. Manufacturing output in the Midwest region rose 8.4% from a year earlier in December, more than twice the 4% increase in national manufacturing output over the same period.
2. Regional machinery output in December was up 12.1% from its year-earlier level, compared to a 3.9% increase in machinery output at the national level.
3. Regional steel output was up 14.6% from its December 2010 level, compared to a 8.5% increase in national steel output over that period.
4. The Midwest’s automotive output was up 14.8% in December from its year-ago level, compared to a 9.8% gain in national automotive output.
MP: The manufacturing sector of the U.S. economy grew at 4% last year, or more than twice the 1.7% growth in overall GDP, so it's pretty clear that American manufacturing is at the forefront of the economic recovery as has been frequently reported here and elsewhere, as weak and sub-par as the overall recovery might be. Without that strong rebound and growth in manufacturing activity last year, the current recovery would be much weaker. And given the strength of Midwest manufacturing activity compared to output at the national level as reported today by the Chicago Fed, I think we can say that it's "Midwest manufacturing" that's at the forefront of the economic recovery. The Rust Belt is coming back.
Related excerpt from a recent WSJ article:
Updates: See previous posts on the Rust-Belt recovery here, here, and here.