Industrial Production in U.S. Probably Increased in January
Industrial production accelerated in January, indicating manufacturing will remain at the forefront of the U.S. economic expansion.
Output (IPMGCHNG) at factories, mines and utilities rose 0.7 percent, the biggest gain in six months, according to the median estimate of 81 economists surveyed by Bloomberg News. Manufacturing in the New York region picked up this month and homebuilder confidence climbed to the highest level since mid-2007.
Business investment in new equipment and the need to rebuild inventories will probably keep factory assembly lines rolling at the start in 2012. Nonetheless, Europe’s financial crisis and slowing growth in emerging economies like China threaten to temper orders for U.S. goods.
“Manufacturing is growing at a fairly solid pace amid improvements in consumer and business demand,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “One risk is if exports to Europe were to slow further.”
The Federal Reserve will release the production data at 9:15 a.m. in Washington. Estimates in the Bloomberg survey ranged from gains of 0.1 percent to 1.2 percent.
Capacity utilization, which measures the amount of a plant in use, rose to 78.6 percent last month, the highest since July 2008, from 78.1 percent in December, according to economists’ forecasts.
Less Utility Use
The gain in output will probably be tempered by a drop in utility use because January was relatively mild. Last month was the fourth-warmest January on record for the contiguous U.S. states, according to the National Oceanic and Atmospheric Administration.
A rebounding auto industry is contributing to the gains in manufacturing. Purchases (SAARTOT) of cars and light trucks climbed to an annualized rate of 14.1 million last month, the highest since the so-called cash-for-clunkers program in August 2009 and the second-strongest since May 2008, according to Autodata Corp. Sales averaged 16.4 million in the two years before the last recession began in December 2007.
With the average age of cars and trucks rising to a record 10.8 years, analysts see pent-up demand boosting U.S. sales to a third-straight annual gain in 2012, the longest streak since sales peaked in 2000.
Ford Motor Co. (F), the second-largest U.S. automaker, reported its 11th consecutive profitable quarter as sales rose and it boosted North American production by 14 percent. The Dearborn, Michigan-based company’s U.S. sales rose 11 percent last year. Ford said it sees its European market worsening while Asia- Pacific keeps growing.
Equipment Demand
Manufacturers and exporters of heavy equipment such as Caterpillar Inc. continue to see growth. Caterpillar, the largest construction and mining-equipment maker, last month posted fourth-quarter earnings and forecast full-year profit that topped analysts’ estimates as demand rose for earth-moving machinery and trucks. The Peoria, Illinois-based manufacturer said it had a record $29.8 billion backlog of orders at the end of 2011.
“For many products demand has been above our ability to produce,” Caterpillar spokesman Michael DeWalt told a conference call on Jan. 26. “We have invested in Caterpillar factories in the United States and around the world to increase production.”
Shares of machinery and equipment makers are outpacing the broader market so far this year. The Standard & Poor’s Supercomposite Machinery Index has climbed 19 percent since the end of 2011, compared with a 7.4 percent increase for the S&P 500 Index.
Manufacturing Accelerates
The Institute for Supply Management’s national factory index rose in January to the highest level in seven months, led by gains in new orders and exports, the group said on Feb. 1.
The Federal Reserve Bank of New York’s regional manufacturing index rose to 15 this month from 13.5 in January, economist project another report at 8:30 a.m. will show.
As factories keep expanding, homebuilding is showing signs of stabilizing.
The National Association of Home Builders/Wells Fargo (USHBMIDX) sentiment gauge increased to 26 this month from 25 in January, according to the median estimate of economists surveyed before the 10 a.m. report. Readings lower than 50 mean more respondents still said conditions were poor.
Bloomberg Survey
================================================================
Empire Ind. Cap. NAHB
Manu. Prod. Util. Housing
Index MOM% % Index
================================================================
Date of Release 02/15 02/15 02/15 02/15
Observation Period Feb. Jan. Jan. Jan.
----------------------------------------------------------------
Median 15.0 0.7% 78.6% 26
Average 14.5 0.7% 78.6% 26
High Forecast 18.0 1.2% 79.0% 28
Low Forecast 10.0 0.1% 78.0% 23
Number of Participants 56 81 67 51
Previous 13.5 0.4% 78.1% 25
----------------------------------------------------------------
4CAST 17.0 1.0% 78.8% 28
ABN Amro 14.0 0.5% --- ---
Action Economics 14.0 0.7% 78.5% 25
Aletti Gestielle 15.5 1.0% 78.9% ---
Ameriprise Financial 16.0 0.6% 78.5% 27
Analytical Synthesis --- --- --- 26
Banca Aletti 12.5 0.6% 78.6% ---
Banesto 14.5 0.6% --- 26
Bank of Tokyo- Mitsubishi --- 0.5% --- ---
Bantleon Bank AG 15.5 0.6% --- ---
Barclays Capital 15.0 0.7% 78.5% 26
Bayerische Landesbank 14.5 0.5% 78.5% ---
BBVA 14.5 0.5% 78.3% 25
BMO Capital Markets 15.0 0.7% 78.6% 27
BNP Paribas 15.0 0.3% 78.0% 26
BofA Merrill Lynch 15.0 0.5% 78.5% 26
Briefing.com 15.0 0.1% 78.2% 25
Capital Economics 15.0 0.9% 78.9% 27
CIBC World Markets --- 0.6% 78.6% ---
Citi --- 0.7% 78.6% ---
ClearView Economics 15.0 0.4% 78.4% 26
Comerica --- 0.5% 78.6% ---
Commerzbank AG 14.0 0.8% 78.7% 26
Credit Suisse --- 0.4% 78.4% ---
Daiwa Securities America --- 0.6% 78.5% ---
Danske Bank 15.0 0.8% --- ---
DekaBank 15.0 0.5% 78.4% 28
Desjardins Group 12.0 0.7% 78.6% ---
Deutsche Bank Securities 10.0 0.8% 78.8% 26
Deutsche Postbank AG --- 0.6% --- ---
DZ Bank 14.2 0.5% --- 25
Exane 13.0 0.7% --- 25
Fact & Opinion Economics 16.5 0.7% --- 24
First Trust Advisors 17.5 0.8% 78.6% ---
FTN Financial --- 0.7% 78.6% 26
Goldman, Sachs & Co. --- 0.8% 78.6% ---
Helaba 15.0 0.6% 78.6% 26
Herrmann Forecasting 16.8 0.7% 78.8% 27
High Frequency Economics 13.5 0.5% 78.5% 23
HSBC Markets 11.0 0.7% 78.6% 25
Hugh Johnson Advisors 12.0 1.0% 78.7% ---
IDEAglobal 15.0 0.6% 78.7% ---
IHS Global Insight --- 1.1% --- ---
Informa Global Markets 14.2 0.8% 78.6% 25
ING Financial Markets 15.0 0.4% 78.5% 25
Intesa Sanpaulo 14.2 0.8% --- 26
J.P. Morgan Chase 15.0 0.9% 78.7% 26
Janney Montgomery Scott --- 0.5% 78.4% 25
Jefferies & Co. 16.0 1.1% 78.8% 26
Landesbank Berlin --- 0.3% 78.1% ---
Landesbank BW 15.5 0.7% 78.6% 26
Maria Fiorini Ramirez --- 0.8% 78.7% 26
Market Securities --- 0.9% 78.7% ---
MET Capital Advisors --- 0.6% --- ---
Mizuho Securities 15.0 --- 79.0% 26
Moody’s Analytics --- 0.4% 78.4% 25
Morgan Keegan & Co. --- 0.4% 78.3% ---
National Bank Financial --- 0.5% 78.5% ---
Natixis --- 0.5% 78.4% ---
Nomura Securities 18.0 0.7% 78.6% 26
Nord/LB 13.0 0.5% 78.3% 26
OSK Group/DMG --- 0.6% --- ---
O’Sullivan 17.0 0.7% 78.6% 26
Parthenon Group 12.1 0.6% 78.6% 25
Pierpont Securities --- 0.9% 78.8% ---
PineBridge Investments 14.0 1.0% --- 25
PNC Bank --- 1.0% 79.0% ---
Raiffeisenbank International --- 0.6% 78.5% ---
Raymond James 14.0 0.8% 78.8% 26
RBC Capital Markets 14.0 0.9% 78.8% 24
RBS Securities --- 0.6% 78.5% ---
Scotia Capital 15.0 0.8% 78.8% 26
Societe Generale 16.5 0.9% 78.7% 28
Standard Chartered 12.5 0.6% 78.6% ---
Stone & McCarthy Research 17.2 0.9% 78.7% 26
TD Securities 15.0 0.5% 78.5% 27
UBS 14.5 0.8% 78.7% 26
Union Investment --- 0.3% 78.4% 26
University of Maryland 14.0 0.5% 78.5% 25
Wells Fargo & Co. --- 0.6% 78.6% ---
WestLB AG 14.8 0.7% 78.6% 25
Westpac Banking Co. 10.0 1.2% --- 27
Wrightson ICAP 13.0 1.1% 78.9% 26
================================================================
To contact the reporters on this story: Robert Willis in Washington at bwillis@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Uploaded by 8672769 at GMT:2012-02-15T12:07:52
Daniel Acker/Bloomberg
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