U.S. Industrial Output Expected to Show Gains

Published on: 17 Aug, 2017

Experts believe that the U.S. Industrial output numbers could give cause for celebration. The numbers are expected to show a gain. Preliminary numbers promise to make good these expectations.

As far as industrial activity goes. the numbers have shown a significant improvement this year, indicating a revival of sorts. For July, this rebound is expected to sustain. Econoay.com predicts that a 0.3% monthly advance will easily be achieved. If this does happen, then industrial activity would have risen for the sixth time in a row.

If analysts are right, then we could be seeing excellent industrial activity, following the strongest rate that it has achieved in over a two year period. Looking at the expectations of the monthly increase, it seems likely that a 2.3% acceleration in year over year trend will be achieved. The good news does not stop there. Analysts also believe the manufacturing component to give cause for celebration. Output has been giving out good figures until now and a rebound seems evident with 0.2% rise for the month of July. It should be noted that the figures were not very good last month.

Although there have been dips and troughs in the manufacturing activity this year, and the pace has just moved up beyond 1%, year on year, growth has continued to remain stable. Experts are also of the opinion that the situation will continue to improve as the year progresses. This does shore up the investor confidence in the industrial sector.

Barclays has predicted that industrial production will rise by 0.4% month on month in July. This will keep the performance at the same level as in June when a similar degree of increase was seen. Utility production will be better than previous months though and rebound is expected here. The manufacturing production will consistently hold momentum and improve by about 0.3% month on month.  According to HSBC analysts, the annual factory shut down by auto manufacturers may skew figures this month, making industrial production estimates difficult. The seasonal adjustment may be impossible to make this year for industrial production as auto sales have not been very good this year. Matching Barclay's estimates, the analysts predict that manufacturing production, as well as industrial production, may show a 0.3% increase in July.

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Danny Abramov

Email: Danny@financialbuzz.com

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