Independent Strategy

Tags: Industrial Production

October retail sales registered a further deceleration in growth.  The control group is still showing a decent rate of y/y expansion but other groups momentum has clearly reversed from the summer pick up.  The industrial production report was bleaker reading.

While China’s 3Q GDP number was a little lower than expectations at 6.0% y/y the monthly production and activity series for September all improved.  Retail sales growth picked up to 7.8% y/y from 7.5% while industrial activity rebounded to 5.8% y/y from 4.4% in August.  Investment was perhaps the one area of disappointment, growth slowing to 5.4% y/y despite a further modest pick up on the State Owned side.

US

POST » 17th October, 2019 » US Sep Industrial Production

US industrial activity disappointed again in September, with output down -0.4% m/m.  Although there was some better news in August, with production from then revised upward a little bit, the underlying trend remains weak.  Manufacturing is still the focal point with the declines we’ve seen in non-durables spreading to durables this month.

Germany

POST » 7th June, 2019 » Germany April Production

April turned out to be another poor month for German industry with the decline in overall industrial production fairly modest compared to the drop on the manufacturing side, where output dropped 2.5% on the month leaving output down 3.4% y/y.

Soft industrial production number which reflects tepid manufacturing activity where growth is now running at its lowest rate is two years.  This matches the deterioration we’ve seen on the orders side of the Federal Reserve bank surveys and fits with the upward pressure seen on the inventory side.

Trade and output data surprising to the upside, boosted by what looks to be activity as firms seek to get ahead of the curve pending the previously expected March 29 Brexit data – which the March PMIs also showed amid a record increase in inventories (and not just compared to UK history, but globally).

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