Segmenting Industrial Recovery and Growth
The Industrial Production Index is the economic indicator that measures real output for all facilities located in the US including the key categories of manufacturing, mining, and utilities. Q2 predictions for recovery have been stifled by the drastic cuts in mining production and dip in utility output. However, the manufacturing sector, which represents approximately 78% of the total production in the US, is expected to continue a strong recovery across the remainder of 2020 with the index approaching pre-COVID levels near the end of 2021. Nevertheless, manufacturers will continue to struggle through supply chain disruptions, labor force challenges, and difficult financial working capital constraints to reach expected growth rates.
Industrial Production Growth Areas
- Recovery of US automotive production levels after industry-wide shutdowns will fuel production rates supported by strong consumer incentive programs.
- Specialty chemical manufacturers will continue to benefit from demands for cleaning chemicals and personal care products while demand for existing product lines recover.
- US manufacturers will invest and support reshoring of critical raw materials to ensure security of supply.
- Manufacturing automation and advancements in automation technology are attracting more focus than ever before and implementation of advanced automation will increase.
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