SEARCH searchBY TOPIC
right_division Green SCM Distribution
Bookmark us
sitemap
SCDigest Logo
distribution

Focus: Manufacturing

Feature Article from Our Manufacturing Subject Area - See All

From SCDigest's On-Target E-Magazine

- Aug. 25, 2015 -

 
Supply Chain News: Federal Reserve Changes Baseline Year on US Industrial Production from 2007 to 2012

 

Move Actually Make Current Numbers Look a Little Better in Comparison

 

 

SCDigest Editorial Staff

Somewhat quietly, in July the Federal Reserve changed its baseline for its monthly index on industrial output from 2007 to 2012.

SCDigest Says:

start

Now, with the index based on the average month in 2012 - a year that saw lower output than 2007 - the index scores are actually higher.

close
What Do You Say?

 

Click Here to Send Us Your Comments
feedback
Click Here to See Reader Feedback

The Fed puts out a considerable amount of data on production and capacity utilization across dozens of sectors of the industrial economy. SCDigest prefers to report on the number for the overall manufacturing sector (as well as sub-sectors underneath that) rather than the more widely cited full industrial production numbers, which in addition to manufacturing include output from mines and utilities.

Those latter two categories, especially utilities, can be highly volatile, for example sending the industrial output number up during a cold January or hot July, as consumers and business use more electricity to heat or cool their homes and offices.

2007 represented the peak year ever for US manufacturing, before it headed south in 2008. The Fed took an average of monthly US manufacturing production as used that as the baseline in recent years, giving that average an index value of 100. So until the recent change, if say the manufacturing index was at 95.5, it meant production that month was 4.5% below the average seen in 2007.

Under that scheme, US manufacturing output fell below the 100 mark in 2008, and dropped all the way down to a score of about 80 in June of 2009, the bottom of the recession. That meant manufacturing output in that month was 20% below the 2007 average baseline.

The index started climbing from there, slowly but steadily. Still, it took all the way until July of 2014 for the index to get back to 2007 levels with a score that exceeded 100. It had stayed about that 100 mark ever since, but not by much, with values in the first half of the year generally somewhere about 102, or 2% above 2007.

Now, with the index based on the average month in 2012 - a year that saw lower output than 2007 - the index scores are actually higher.

The manufacturing score for July was 105.7, meaning output was 5.7% above average 2012 levels. It has been tracking up slightly most months so far in 2015, after starting January with a score of 104.5. The July total was up a modest 1.5% over the 2014 total.

(Manufacturing Article Continued Below)

 

CATEGORY SPONSOR: SOFTEON

Learn More about Softeon's Innovative Supply Chain Solutions

 


Of course, the results for various sectors
can vary dramatically from the overall average. Again, each sector has its 2012 average monthly output as the baseline with a score of 100, meaning, for example, that motor vehicle output in July was up a strong 45% from 2012.

 

 

Sector
July Score
Motor Vehicles
145.0
Railroad Rolling Stock
130.9
Heavy Duty Trucks
125.6
Computers/Peripherals
121.5
Appliances
115.4
Plastic/Rubber Products
114.8
Furniture 
112.6
Hardware
109.5
Medical Equipment
109.4
Ship Building
106.4
Textiles
105.5
Fabricated Metals
105.0
Semiconductors
105.0
Food
104.7
Chemicals
103.8
Aerospace
102.5
Electrical Equipment
102.4
Primary Metals
101.7
Machinery
98.3
Pharmaceuticals
98.1
Paper
97.1
Industrial Gas
95.9
Paperboard
94.3
Apparel
92.0

 

 

In general, these numbers are higher than they would be if the comparison was back to 2007.

 

Any reaction to these manufacturing numbers? Anything surprise you? Let us know your thoughts at the Feedback section below.

Recent Feedback

 

No Feedback on this article yet

 

 
.
.