| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.3% | -2.5% | -0.1% | 0.1% |
| Year over Year | -6.7% | -3.9% | -3.7% |
Highlights
The latest industrial production figures paint a somber picture of the industrial production landscape in May, which highlights a significant dip and a period of stagnation, reflective of broader economic challenges.
Month-over-month, industrial production fell in May, dropping by 2.5 percent compared to April. This decline, even after adjusting for seasonal and calendar variations, signals a concerning reversal from the previous month's marginal gain. In April, revised data showed a slight increase of 0.1 percent gain over March, suggesting a brief, albeit weak, respite from the downward trend.
Year-over-year figures are even more striking. May 2024 production was down 6.7 percent compared to May 2023, marking a substantial decline in industrial output. This stark decrease follows a 3.7 percent year-over-year drop recorded in April 2024, underscoring a persistent downward trajectory.
Several factors contributing to this decline include a significant drop in the automotive industry, capital goods, and intermediate goods sectors, which are particularly sensitive to supply chain disruptions.
The provisional nature of the May data suggests that future revisions could alter the current picture slightly, as seen with the revised April figures. However, the overall trend points towards a need for strategic interventions to rejuvenate industrial production. Policies aimed at boosting energy efficiency, enhancing supply chain resilience, and fostering innovation could play pivotal roles in reversing the current downturn.
Month-over-month, industrial production fell in May, dropping by 2.5 percent compared to April. This decline, even after adjusting for seasonal and calendar variations, signals a concerning reversal from the previous month's marginal gain. In April, revised data showed a slight increase of 0.1 percent gain over March, suggesting a brief, albeit weak, respite from the downward trend.
Year-over-year figures are even more striking. May 2024 production was down 6.7 percent compared to May 2023, marking a substantial decline in industrial output. This stark decrease follows a 3.7 percent year-over-year drop recorded in April 2024, underscoring a persistent downward trajectory.
Several factors contributing to this decline include a significant drop in the automotive industry, capital goods, and intermediate goods sectors, which are particularly sensitive to supply chain disruptions.
The provisional nature of the May data suggests that future revisions could alter the current picture slightly, as seen with the revised April figures. However, the overall trend points towards a need for strategic interventions to rejuvenate industrial production. Policies aimed at boosting energy efficiency, enhancing supply chain resilience, and fostering innovation could play pivotal roles in reversing the current downturn.
Market Consensus Before Announcement
Industrial production in May is expected to rise 0.3 percent on the month after edging 0.1 percent lower in April and falling 0.4 percent in March.
Definition
Industrial production measures the physical output of the nation's factories, mines and utilities. Data are collected from companies in the sector with fifty or more employees and include mining and quarrying, manufacturing, energy and, in contrast to its Eurozone counterpart, construction.
Description
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.
Like the manufacturing orders data, the production index has the advantage of being available in a timely manner giving a more current view of business activity. Those responding to the data collection survey account for about 80 percent of total industrial production. Like the PPI and the orders data, construction is excluded.
This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
Like the manufacturing orders data, the production index has the advantage of being available in a timely manner giving a more current view of business activity. Those responding to the data collection survey account for about 80 percent of total industrial production. Like the PPI and the orders data, construction is excluded.
This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
