Industrial production moved forward at a very nice pace last month. Although the overall figure gets the headline, I prefer to look at manufacturing production. The total number also includes utilities and mining, and weather swings the utility component around a good bit.
There’s no sign of slowing overall, but home electronics production was way down. We saw this sector fade in retail sales. I’m a bit surprised, because I’ve been touting less interest-sensitive parts of consumer spending as the big thing for 2006. However, it’s quite possible that the swing in home electronics is from fading interest in the multi-thousand dollar gear, which would be consistent with consumers paying down their credit cards and trying to rein in interest expense. Business products, including electronics, looked very good. Clothing was the other significant down sector, but this time a year the varying date of Easter messes up the seasonal adjustment, so I’m taking that with a grain of salt.
Business Strategy Implications: Steady as she goes, unless you’re selling home electronics, or you are in their supply chain. In that case, you need to stop what you’re doing an drill down on the recent decline in the sector. (Give me a call if you need help on that.)