NEW YORK (TheStreet) -- The manufacturing sector is ready for liftoff in Europe and Japan, according to an analysis by the New York-based Economic Cycle Research Institute, which studies such matters. Even the U.S. factory sector will benefit, but most of the growth will be overseas, ECRI said.
What's more, there should be ample time for investors to get in on the action.
"A clear global industrial upturn is happening," said Lakshman Achuthan, co-founder & chief operations officer of ECRI. He's basing that assessment on data showing a current rebound in industrial production from six months ago as well as proprietary ECRI indicators pointing to a sustained upswing.
"There is a broad turnaround from the situation we saw last fall and our leading indicators have improved," he said, specifically highlighting ECRI's "global industrial growth long leading index." In the simplest terms, that metric moves up or down about 12 months ahead of changes in the real manufacturing economy. For that reason, investors and corporate planners have plenty of time to make decisions in response.
Part of the reason for the improved prospects for the industrial sector are that both Europe and Japan have benefited from weaker currencies, which make their goods cheaper to foreign buyers, Achuthan said.
The global manufacturing industry is so connected through its supply chains that when the sector in one country improves, other countries see a benefit also. So we'll likely see an uptick in the U.S. factory space, although it likely won't be quite as strong as overseas, he explains.