The ChicagoFederal Reserve reported today that its Midwest Manufacturing Index was unchanged in March but remained at a three and-a-half year high of 92.2, and 8.6% above last March. Here are some highlights of manufacturing activity in the 7th Federal Reserve district covering Illinois, Indiana, Iowa, Michigan, and Wisconsin:
1. Manufacturing output in the Midwest region rose 8.6% from a year earlier in March, more than one-and-half times greater than the 5.0% increase in national manufacturing output over the same period (see chart).
2. Regional machinery output in March gained 10.4% from its year-earlier level, and double the 5.2% increase in machinery output at the national level.
3. Regional steel output improved 11.2% from its March 2011 level, compared to an 8.1% increase in national steel output over that period.
4. The Midwest’s automotive output increased 14.2% in March from its year-ago level, compared to an 11.4% gain in national automotive output.
MP: The manufacturing sector of the economy grew at 4.6% last year, or more than twice the 1.7% growth in real GDP, as American manufacturing remains at the forefront of the economic recovery as has been frequently reported here and elsewhere. And given the growth in Midwest manufacturing activity over the last year (+8.6%) compared to output at the national level (5.0%) as reported today by the Chicago Fed, I think we can say that it's "Midwest manufacturing" that remains the forefront of the economic recovery. The Rust Belt and its traditional industries like machinery, steel and motor vehicles are coming back.
As was reported in Saturday's WSJ, "The U.S. economy is in the early stages of a long-term manufacturing renaissance," according a recent Bank of America report titled "An Industrial Revolution." From the article:
"U.S. manufacturers are more competitive with global rivals than at any time in recent memory. Energy costs and other expenses are falling, manufacturers say. And U.S. workers' pay has become more competitive with foreign wages."