In May, the index for production of durable goods was 83.1, which was the second lowest level for the index since January 2010. Compared with one year ago, the index contracted 23.4%, which was the second month in a row that the one-month rate contracted faster than 23%.

The annual rate of change, which is easier to correlate with other data points, contracted 5.02% this month. This was the third consecutive month of accelerating contraction. The key leading indicator of production—durable goods new orders—is indicating further contraction in production.

Even though the annual rate of contraction was accelerating rapidly in May, it was still a long way from the fastest rate of contraction, 19.8%, during the financial crisis. If the index remained at its current level into the future, then the annual rate of contraction would contract faster than during the financial crisis at the start of 2021. However, May’s index was 6 points higher than April’s index. If the index increased just two points every month, then the annual rate of contraction would accelerate to 15.2%.

We track industrial production and its leading indicators for a number of industries.

Accelerating Growth: 

Decelerating Growth: electronics/computers, military

Accelerating Contraction: aerospace, appliances, automotive, construction materials, custom processors, durable goods, food/beverage processing, forming/fabricating (non-auto), furniture, hardware, HVAC, industrial motors/hydraulics/mechanical components, machinery/equipment, medical, metalcutting job shops, oil/gas-field/mining machinery, off-road/construction machinery, petrochemical processors, plastic/rubber products, power generation, primary metals, printing, pumps/valves/plumbing products, ship/boat building, textiles/clothing/leather goods, wood/paper products

Decelerating Contraction: