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MAPI QuickPoint - A glance at a building block of worldwide business data  MAPI QuickPoint

Analysis on Industrial Production: Fundamentals Strong Despite February Weather Issues

The following is an analysis from Daniel J. Meckstroth, Ph.D., Chief Economist for the Manufacturers Alliance/MAPI, regarding the industrial production report for February 2010.

“The Federal Reserve reported that industrial production increased 0.1 percent in February but manufacturing production fell 0.2 percent,” Meckstroth said. “Unfortunately, severe weather across the coasts of the United States last month disrupted transportation and production schedules.  Production in consumer durables industries was particularly affected.  An important contributor to the weakness was that Toyota closed several factories in February which rippled adversely through the supply chain.  Motor vehicle production fell 4.4 percent in February from the previous month. 

“It is encouraging, though, that when motor vehicles and parts is removed, manufacturing production was actually up 0.1 percent in February,” he added.  “We believe that the fundamentals are strong for continued manufacturing recovery driven by pent up consumer demand, repair and replacement of business equipment, and exports.  The minor setback in February is expected to be followed by strong makeup gains in March.” 

 

 
  		   

Issues in Brief  Issues in Brief
E-557.pdfThe United States Is Losing Its Capacity to Manufacture
The manufacturing base declined in 2009. Capacity fell due to a sharp reduction in the number of manufacturing plants amid acceleration in factory productivity. This report discusses the declining trend in the number of plants in the current decade and finds that the rate of plant closings is not the primary factor in the decline in the stock of manufacturing plants. Nevertheless, excess industrial capacity is deep and widespread across the industrial sector. A finding is that the extent of capacity paring within each industry seems to depend upon the forecast, or hope of an eventual return to normalcy in demand trends during the coming economic expansion. Should business regulations and taxes become onerous and/or confidence in the industrial recovery wane, there is ample potential for further major cuts in the industrial base.
E-556.pdfSEC and Executive Compensation Shareholder Proposals
Many companies that have received shareholder proxy proposals seeking changes in executive compensation practices have requested no-action letters from the SEC's Division of Corporation Finance staff. Such a letter indicates the Division will not recommend that enforcement action be taken against the company.
E-555.pdfWhen Satisfied Customers Aren't Loyal Ones
Member CEOs and division presidents recently told us that they expect customer satisfaction to be the single most valuable metric for measuring the health of their businesses in 2010.  This article offers an overview of current practice in our membership for surveying customers, and offers a few tips for making your next customer satisfaction survey more effective.
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“The sector is regaining its footing again,” said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI. “An inventory swing is pushing up orders for materials and the resulting increase in production activity is having a positive impact on business equipment spending.” The durable-goods data was consistent with a moderate-paced recovery, Mr. Meckstroth said, though the level of production will probably taper off in future quarters. The overall increase was helped by a 3.6 percent rise in orders for cars and car parts. But aircraft orders dropped by 38.2 percent in December, after a 40 percent drop in November.
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