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Post by unlawflcombatnt on Jun 17, 2007 23:20:46 GMT -6
Despite some of the scattered claims that manufacturing is making a comeback, there is little evidence to support this view. Industrial Production increased 0.0% for the month of May, and has increased a total of only 0.1% over the last 3 months. Since May 2006, the Industrial Production Index has increased only 1.6%. May's Manufacturing Capacity Utilization declined slightly to 79.9% in May 2007, and is -0.4% less than May 2006's 80.3%. Total Industry Capacity Utilization was 81.3% in May 2007, which was -0.2% less than April's 81.5%, and -0.4% less than May 2006's 81.7%. Declining Capacity Utilization means that production capacity is growing faster than the Demand for production. As such, it's also a harbinger of recession. Both the 1982 recession and the 2001-2002 recession were marked by sharp declines in Capacity Utilization. This can be seen from the chart below from the Federal Reserve. Unfortunately, the above chart doesn't extend up to May 2007. Given that Capacity Utilization has actually gone down over the last year, the line would have declined slightly from the last charted spot on the graph. The full Industrial Production report from the Federal Reserve can be found at www.federalreserve.gov/releases/g17/current/g17.pdf
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Post by blueneck on Jun 18, 2007 4:21:10 GMT -6
Manufacturing comeback? What manufacturing comeback?
US manufacturing output and manufacturing employment has been in decline, some would even say free-fall at least 9-10 months each year for the last 7 years. Sure there have been some months of uptick, mostly seasonal, or a big order for durable goods like aircraft that skews the numbers. Sometimes you will see companies ramp up production to build inventory just prior to containerizing up the plant and sending it off shore.
A month or two of positive numbers hardly offsets many more months of declines. If anything, my own observation is that offshoring is accelerating, not slowing down, perhaps in anticipation of a new president and congress that might not be so friendly to outsourcing.
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