Monday, March 19, 2012

Chicago Fed: Midwest Manufacturing Is Booming


The ChicagoFederal Reserve reported today that its Midwest Manufacturing Index (CFMMI) increased 1.3% in January, to a seasonally adjusted level of 90.1 (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 9.1% from a year earlier in January, almost twice the 4.7% increase in national manufacturing output over the same period (see chart).
         
2. Regional machinery output in January was up 11.1% from its year-earlier level, compared to a 4.6% increase in machinery output at the national level. 

3. Regional steel output was up 13.4% from its January 2010 level, compared to an 8.7% increase in national steel output over that period.

4. The Midwest’s automotive output was up 17.5% in January from its year-ago level, compared to a 12.1% 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.  And given the growth in Midwest manufacturing activity over the last year (+9.1%) compared to output at the national level (4.7%) 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.  

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