Chicago Fed: Midwest Manufacturing Is Booming; Midwest April Auto Production Soars to 2007 Level
The ChicagoFederal Reserve reported today that its Midwest Manufacturing Index increased 2.4% in April compared to March, following a revised 0.22% monthly decline in March. The April increase was the largest monthly gain in Midwest manufacturing activity since September 2003, more than 8 years ago, and brought the index to the highest level since June 2008, almost four years ago. Here are some highlights of manufacturing activity in the 7th Federal Reserve district that covers Illinois, Indiana, Iowa, Michigan, and Wisconsin:1. Manufacturing output in the Midwest region rose 12% from a year earlier in April, more than twice the 5.8% increase in national manufacturing output over the same period (see chart). In comparison, the overall U.S. economy (real GDP) grew by only 2.1% in the period from Q1 2011 to Q2 2012. 2. Regional machinery output in April gained 11.5% from its year-earlier level, compared to a 6.6% increase in machinery output at the national level. 3. Regional steel output improved 10.7% from its April 2011 level, compared to an 7.6% increase in national steel output over that period.4. The Midwest’s automotive output increased by a whopping 28.2% in April from its year-ago level, compared to a 16.4% gain in national automotive output. The index level of 99.6 for Midwest auto sector production in April was at the highest level since November 2007, indicating that the auto industry in the Midwest has now made a complete recovery from the effects of the Great Recession. MP: Midwest manufacturing output growth continues to lead national manufacturing output growth, which continues to lead overall economic growth measured by real GDP. The lastest Chicago Fed report suggests that U.S. manufacturing, especially in the Midwest, remains at the forefront of the economic recovery measured by growth rates in output. In another milestone for manufacturing, Midwest automotive production in April returned to it pre-recession 2007 level for the first time since the recession started in December 2007.