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15 May 2015
US industrial production might see a 0.3%mom gain – ING
FXStreet (Barcelona) - James Knightley, Senior Economist at ING, expects US Industrial Production to register an above consensus gain at 0.3% mom, but to confirm the message that the activity data isn’t bouncing very strongly after the weak 1Q outcome.
Key Quotes
“For sure, bad weather and the disruption from the industrial action shutting West Coast ports played its part in the disappointing GDP reading for 1Q15 – we suspect that it will be revised negative soon – but the collapse in shale oil and gas drilling had an important role too.”
“The Baker Hughes rig count has more than halved since December, indicating the steep drop in prospective output in the wake of the collapse in oil prices. Indeed, we suspect it was the main factor behind the 23.1% annualised drop in investment in “structures”. Consequently we expect to see another sizeable drop in the “mining” component of industrial production today.”
“However, there should be better news from the utilities component. Weather fluctuations have made utility output very volatile and now that seasonal patterns are normalising we expect output to move higher again.”
“The small uptick in the manufacturing ISM, seen earlier this month, offered some encouragement for the sector, but we are still down heavily on the levels seen in the second half of 2014. Employment in the sector was also little changed on the month, rising just 1,000.”
“Nonetheless, we expect to see a respectable 0.4% MoM gain in manufacturing output, helped by the fact that component parts are now coming in from the docks. This is allowing manufacturers to get production lines back up and running again.”
“With mining and utilities virtually offsetting each other we expect industrial production to rise 0.3% MoM versus the consensus 0.0% prediction.”
Key Quotes
“For sure, bad weather and the disruption from the industrial action shutting West Coast ports played its part in the disappointing GDP reading for 1Q15 – we suspect that it will be revised negative soon – but the collapse in shale oil and gas drilling had an important role too.”
“The Baker Hughes rig count has more than halved since December, indicating the steep drop in prospective output in the wake of the collapse in oil prices. Indeed, we suspect it was the main factor behind the 23.1% annualised drop in investment in “structures”. Consequently we expect to see another sizeable drop in the “mining” component of industrial production today.”
“However, there should be better news from the utilities component. Weather fluctuations have made utility output very volatile and now that seasonal patterns are normalising we expect output to move higher again.”
“The small uptick in the manufacturing ISM, seen earlier this month, offered some encouragement for the sector, but we are still down heavily on the levels seen in the second half of 2014. Employment in the sector was also little changed on the month, rising just 1,000.”
“Nonetheless, we expect to see a respectable 0.4% MoM gain in manufacturing output, helped by the fact that component parts are now coming in from the docks. This is allowing manufacturers to get production lines back up and running again.”
“With mining and utilities virtually offsetting each other we expect industrial production to rise 0.3% MoM versus the consensus 0.0% prediction.”