Industrial Production Moderates in August

Industrial Production Moderates in August

*Industrial production moderated in August rising 0.4% m/m and 5.9% yr/yr (Chart 1), while July’s increase was revised down to 0.8% reflecting supply constraints that have curtailed production and the Delta variant’s impact on demand for goods. Despite moderation in the pace of industrial production growth, August marked the first month in which the level of industrial production surpassed that in February of 2020, and the second consecutive month in which manufacturing was above its February 2020 level. August’s data suggests the brunt of the Delta variant’s impact on economic activity has fallen on the service sector, with goods demand showing underlying strength.

*Consumer goods production rose 0.9%, driven by increases in the production of non-durable consumer goods and energy which rose 1% and 2.5%, respectively (Chart 2). Durable consumer goods production moderated, increasing 0.3% after a 5% increase in July, bolstered by a 0.8% increase in home electronics production.

*Motor vehicle and parts production flattened rising 0.1% m/m, with motor vehicle production contracting 0.3%, while parts production rose 0.4% (Chart 3). Motor vehicle production remains well below its pre-pandemic levels, reflecting ongoing semiconductor shortages and supply chain disruptions that anecdotal evidence suggest will persist into 2022.

*Among the industrial groups, business equipment production rose 0.5%, although production of industrial and other equipment was flat. Materials production flattened and is below its level in February 2020.

Chart 1: Industrial Production Index

Chart 2: Industrial Product Index (Consumer Goods)

Chart 3: Industrial Production Index (Motor Vehicles)

Mickey Levy, [email protected]

© 2021 Berenberg Capital Markets, LLC, Member FINRA and SPIC

Remarks regarding foreign investors. The preparation of this document is subject to regulation by US law. The distribution of this document in other jurisdictions may be restricted by law, and persons, into whose possession this document comes, should inform themselves about, and observe, any such restrictions. United Kingdom This document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers. Copyright BCM is a wholly owned subsidiary of Joh. Berenberg, Gossler & Co. KG (“Berenberg Bank”). BCM reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without the BCM’s prior written consent. Berenberg Bank may distribute this commentary on a third party basis to its customers.

Member FINRA & SIPC
This email and any files or attachments transmitted with it may contain confidential or privileged information and are intended solely for the use of the intended recipient. If you are not the intended recipient, please do not copy, retain, disclose or use any part of the message or its attachments. Please notify the sender immediately by return email and destroy or delete any copies. Dissemination or use of this information by anyone other than the intended recipient is unauthorized and may be illegal. Communications by email cannot be guaranteed to be secure or error-free. Emails and their attachments are subject to being intercepted, becoming corrupted, getting lost or delayed, or may contain viruses. Therefore, neither the sender nor Berenberg Capital Markets LLC (BCM) accepts any liability for any errors or omissions in the content of this message or problems in its transmission, including those arising as a result of its transmission over the internet.
BCM does not assume liability for the correctness and completeness of all information given and/or attachments contained herein. The provided information has not been checked by a third party, especially an independent auditing firm. BCM explicitly points to the stated date of preparation. The information given can become incorrect due to passage of time and/or as a result of legal, political, economic or other changes. BCM does not assume responsibility to indicate such changes and/or to publish an updated document. Any document(s) or attachment(s) is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers.
In light of upcoming regulatory changes, please be informed that BCM will continue to share information with you until [email protected] receives your termination/deletion request. For more information about the General Data Protection Regulation (GDPR) and our privacy policies please refer to https://www.berenberg-us.com/legal-notice. BCM reserves all the rights in this communication. No part of this communication or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without BCM’s prior written consent.
The information contained herein and sourced may have been adopted from various news sources, for example, Bloomberg, Reuters, Street Account and various other sources. BCM does not claim accuracy, completeness, timeliness, suitability, or otherwise regarding all the information on the securities, stock markets, or developments referred to within. On no account should the Content be regarded as a substitute for the recipient procuring information for himself/herself or exercising his/her own judgments. BCM is not responsible for any recipient(s) use of this information. This Content is not a solicitation or an offer to buy or sell any of the securities contained herein. This information does not constitute a recommendation or take into account the particular investment objectives, financial situations, or needs of clients. Clients should consider whether any advice or recommendation in this Content is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of securities which may be referred to in this Content and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain securities.