AI Online


Industrial Production Stages “Decent Recovery” Even Without Popular “Cash for Clunkers” Program

IHS Chief Economist Nariman Behravesh's analysis and commentary on September Industrial Production

Bottom Line

Ø Industrial production rose 0.7% in September. The August rise was revised up from 0.8% to 1.2%.

Ø In the third quarter the rise in industrial production was 5.2%, the first quarterly rise since the recession began in late 2007.

Ø The manufacturing sector saw gains of 0.9% in September, and a 7.1% rise in the third quarter, the biggest increase since 1999.

Ø Some of the sharp increase in production in the past three months was due to the “cash for clunkers” program. Excluding motor vehicles and parts, manufacturing output was up 0.5% in September and 3.8% for the third quarter—still a respectable showing.


The sharp rise in third quarter industrial production is not sustainable. Some of the rise was due to a temporary boost from the “cash for clunkers” program and inventory rebuilding. Nevertheless there are clear signs of a broad-based recovery in most of the industrial sectors. This means that industrial production growth will remain firmly in positive territory in the coming quarters, but will ease back a little as the effects of the temporary factors wear off.

Previous posts

Next posts

Fri. July 19th, 2024

Share this post