aerospace, appliances, automotive, CCP Virus, chemicals, components, computers, coronavirus, COVID 19, durable goods, electrical equipment, electronics, fabricated metals products, Federal Reserve, Following Up, food products, healthcare goods, inflation-adjusted output, machinery, manufacturing, manufacturing output, manufacturing production, medical devices, metals, non-durable goods, paper, real growth, Wuhan virus
A little earlier today, RealityChek presented some lowlights from this morning’s Federal Reserve U.S. manufacturing production report (for April). As promised, here’s a more granular look at the results, which yield even more insights as to how the CCP Virus blow to the economy is reflecting – and probably influencing dramatically changed spending patterns.
The table below shows the findings for durable goods industries, the super-category that covers products with expected usage and shelf lives of three years or more. Included are the original March inflation-adjusted output changes, the revised March data, and the April statistics:
Wood products: -4.22% -3.15% -9.04%
non-metallic mineral products: -6.56% -6.50% -16.26%
Primary metals: -2.82% -3.95% -20.37%
Fabricated metal products: -8.28% -4.23% -11.33%
Machinery: -5.56% -3.05% -10.98%
Computer & electronic products: -1.89% -1.24% -5.02%
Electrical equip, appliances, components: -2.24% -2.83% -5.99%
Motor vehicles and parts: -28.04% -29.96% -71.69%
Aerospace/miscellaneous transport equip: -8.12% -8.90% -21.65%
Furniture and related products: -9.99% -6.50% -20.60%
Miscellaneous manufacturing: -9.94% -7.09% -9.05%
(contains most of those non-pharmaceutical healthcare goods)
As in the broader category analysis from earlier today, the automotive collapse – over both March and April – stands out here, although it was joined in the double-digit neighborhood (at much lower absolute levels of course) by six of the other eleven sectors. And as predicted in last month’s post on the March Fed report, the sector that’s held up best has been the computer and electronics industry – though following surprisingly close behind is electrical equipment, appliances, and their components.
It’s also easy to see how the rapid deterioration in automotive and the miscellanous transportation category that includes aerospace (especially in April for the latter) spilled over into supplier industries like metals and fabricated metal products, and machinery.
One durable goods puzzle: the relatively fast April decrease in the miscellaneous manufacturing category, which contains non-pharmaceutical medical goods so crucial for the nation’s CCP Virus response.
The second table shows the same information for the non-durables super-category, where the virus impact has been considerably lighter. Among notable results – the sharp worsening of after-inflation output in the food sector. Although it fared relatively well, there can be little doubt that the worker safety problems in meat-packing plants, along with the cratering of big customers – mainly the restaurant and hotel businesses – played big roles.
The non-durables results also make clear that the sector that’s survived best so far has been paper. Also excelling (at least relatively speaking): the enormous chemicals sector. This industry also contains the pharmaceutical industry, although the any positive CCP Virus impact seems unlikely to date because no vaccines or treatments have been developed yet.
Food, beverage, and tobacco products: -0.76% -1.56% -7.10%
Textiles: -14.05% -6.98% -20.72%
Apparel and leather goods: -16.54% -10.31% -24.10%
Paper: -2.04% -0.08% -2.58%
Printing and related activities: -18.18% -10.75% -21.16%
Petroleum and coal products: -5.93% -6.56% -18.55%
Chemicals: -1.65% -1.50% -5.14%
Plastics and rubber products: -7.60% -4.37% -11.03%
Other mfg (different from misc above): -5.37% -4.29% -10.37%
The virus crisis contains so many moving parts (e.g., vaccine and therapeutics progress; infection, fatality, and testing data; uneven state reopening and national social distance practicing; consumer attitudes; second wave possibilities) that extrapolating the manufacturing trends to date seems foolhardy. But tracking industry’s winners and losers as the months pass could still provide important clues as to how much further the economic woes it’s caused will continue; and when, how quickly, and how completely recovery arrives.