The Extremely Uneven Manufacturing Recovery in Pictures
One Huge Problem
Auto production took the steepest hit but it has since recovered.
Aircraft and aircraft parts production fell off a cliff and cannot get back up.
Industrial Production Components 1985-Present
The long-term chart shows the hugely cyclical nature of the aircraft industry, often unrelated to recessions.
Recoveries for autos and aircraft can be lengthy. But in this case, auto production recovered quickly based on the Fed's Industrial Production report this morning.
For more details and charts, please see Huge Miss in Industrial Production Output vs Expectations.
Index Levels Don't Tell the Full Story
Neither Index levels nor percentage moves tell the full story. The pertinent numbers are the actual values of production components.
Manufacturers' Value of New Orders
The above image is the right hand portion of Table 2 in the Monthly Report On Manufacturers’ Shipments, Inventories and Orders for July 2020.
Year-to-Date Synopsis Through July
- Manufacturing down $329.782 billion. Of which durable goods were down $204.551 billion and non-durable goods were down $125.231 billion.
- Transportation was down $167,861 billion. Aircraft accounted for $88.505 billion of the loss. The negative year-to-date number is order cancellations.
- $88.505 billion is is over half of the transportation loss and 43% of the durable goods loss.
One Huge Problem and Lots of Small Ones
Aircraft is the huge problem but nondurable goods, primary metals, and machinery are more than big enough to matter.
How Long Will It Take For the Airline Industry to Recover?
It's possible autos have stabilized but I do expect another swoon down as the recovery stalls.
Aircraft is another matter.
For details and discussion, please see How Long Will It Take For the Airline Industry to Recover?