If we are to believe the evening news or even many TV-ready economists, the American Manufacturing sector is either headed for or already experiencing a recession. The usual suspects include plunging commodity prices, a stronger dollar and weak foreign demand. A fresh perspective, from two experts at Wells Fargo, is worth considering. In an article from Business Insider this week, they identify and explain four factors from the National Bureau of Economic Research that seem to indicate that while the scenario is not all rainbows, the situation is not catastrophic. Those four factors include:
1. Industrial production is increasing.
2. Employment is lower, but is not impacting manufacturing activity.
3. Manufacturing workers income is better now than the last expansion between 2002-08.
4. Shipments are down but real sales have held steady when adjusted for inflation.
We appreciate these insights and hope that our many manufacturing clients can gain some additional perspective from this study.