In January, the index for production of durable goods was 103.7. Compared with one year ago, the index contracted 1.1%, which was the slowest rate of contraction since February 2020. The month-over-month rate of contraction has decelerated virtually every month since the economic lockdowns started in 2020, meaning manufacturing production has increased since April.

The annual rate of change, which is easier to correlate with other data points, contracted 9.0% this month. This was the 11^th consecutive month of accelerating contraction. The key leading indicator of production – durable goods new orders – has bottomed out, according to its rate of change, and is indicating that production should do the same soon. Also, consumer durable goods spending, which leads durable goods new orders, grew more than 11% from June to November and 9.5% in December. This seemingly means production needs to increase significantly to keep from eating too far into inventories.

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

Accelerating Growth: appliances, HVAC

Decelerating Growth: electronics/computers

Accelerating Contraction: construction materials, durable goods, forming/fabricating (non-auto), furniture, medical, metalcutting job shops, oil/gas-field/mining machinery, petrochemical processors, primary metals, printing, pumps/valves/plumbing products, textiles/clothing/leather goods, wood/paper products

Decelerating Contraction: aerospace, automotive, custom processors, food/beverage processing, hardware, industrial motors/hydraulics/mechanical components, machinery/equipment, military, off-road/construction machinery, plastic/rubber products, power generation, ship/boat building