Monday, April 09, 2012

Chicago Fed: Midwest Manufacturing Is Booming

The ChicagoFederal Reserve reported today that its Midwest Manufacturing Index increased 1.0% in February, to a three and-a-half year high of 90.1 (2007 = 100), following a revised 2.1% monthly gain in January. Here are some highlights of manufacturing activity in the 7th Federal Reserve district covering Illinois, Indiana, Iowa, Michigan, and Wisconsin:

1. Manufacturing output in the Midwest region rose 10.1% from a year earlier in February, almost twice the 4.7% increase in national manufacturing output over the same period (see chart).
2. Regional machinery output in February gained 10.9% from its year-earlier level, compared to a 4.8% increase in machinery output at the national level. 

3. Regional steel output improved 13.9% from its February 2010 level, compared to an 9.8% increase in national steel output over that period.

4. The Midwest’s automotive output increased 18.7% in February from its year-ago level, compared to a 12.9% gain in national automotive output. 

MP: The manufacturing sector of the economy grew at 4.6% last year, or more than twice the 1.7% growth in real GDP, so it's 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 (+10.1%) compared to output at the national level (4.8%) as reported today by the Chicago Fed, I think we can say that it's "Midwest manufacturing" that is at the forefront of the economic recovery.  The Rust Belt and its traditional industries like machinery, steel and motor vehicles are coming back. 


At 4/09/2012 8:58 AM, Blogger juandos said...

What would've have been interesting would have the Chicgo Fed name the specific states that were part of this increased manufacturing and which states were not...

At 4/09/2012 1:02 PM, Blogger morganovich said...

i think this is a bit of a mis-characterization.

the mid west is still lagging in terms of recovery. a quick look at p1 of the release shows that the midwest had a much steeper decline during the recession and is still further below pre recession levels as a % than the US IPMFG.

percentages can be very misleading this way.

in terms of recovery, manufacturing as a whole lags the economy as a whole (gdp has recovered but manufacturing has not) and midwestern manufacturing lags national manufacturing.

calling that "booming" seems to me to be extremely misleading.

At 4/20/2012 6:50 PM, Blogger james said...

The only question concerning the current economic recovery is can it continue.


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