Industrial Production Up 20% in May

Consumer durable goods industrial production in May was up 19.8% compared to May 2009. This is the best month over month growth since March 1984 (of course we are coming off one of the worst contractions in industrial production since at least the Great Depression). And, it marks the fifth consecutive month of double digit month over month growth. It appears that consumer durable goods industrial production is starting to break out of the range of the mid 80s that it has been in for the last eight months. The index now stands at 88.6, which is the highest level since October 2008. This level is similar to the level of output in late 1997 and early 1998. Most of the industrial production indices that I track have moved noticeably off of their bottoms and show signs of continuing improvement. There are two exceptions, one of which might surprise you. Power transmission equipment is still virtually at its bottom, which occurred in July 2009. The surprise is aerospace industrial production. Most everywhere I go people assume that aerospace is one of the sectors leading the manufacturing recovery. But, based on the industrial production index it is not. The index is clearly on a downward sloping trend since December 2007. And, other than the low levels of production in late 2008 because of the Boeing strike, the aerospace industrial production index is at its lowest level since January 2007. For more on industrial production go here.