For manufacturers, understanding where the economy is headed is important. But what will drive better decisions is understanding where your specific markets are headed.
You may have heard economists or commentators on the news refer to the notion of a K-shaped economy: some segments are faring better (the upward part of the “K”), and others are struggling (the downward piece of the “K”). This divergence is evident within the industrial sector. According to Federal Reserve data analyzed by ITR Economics, overall industrial production has remained relatively flat compared to December 2019, declining 0.2%. Yet beneath that headline, the differences are striking:
The takeaway? There is no single manufacturing economy. A business serving high-growth markets may be experiencing an entirely different environment than one exposed to struggling industrial sectors.
The longer-term picture reinforces this divergence. US high-tech industrial production has climbed to an index reading of 186.3 (2017 = 100, so this means an 86.3% increase from 2017 levels), while industrial production excluding high-tech stands at just 100.6, a slim 0.6% gain since 2017.
At ITR Economics, we help manufacturers move beyond broad economic headlines to understand the industries that actually drive their revenue.
Through market-specific forecasts and custom-weighted market indexes, we help companies answer important questions:
For example, comparing a manufacturer's sales against a custom index of its underlying markets can reveal whether the company is capturing available demand or potentially leaving opportunities on the table.
That insight becomes particularly valuable when developing budgets, evaluating capital investments, and preparing for the next phase of the business cycle.
Manufacturers don't need more data for the sake of data. They need to understand what's coming, what it means for their business, and what to do about it.
We at ITR Economics combine economic forecasting, industry intelligence, and customized analysis to help manufacturers anticipate change, identify opportunities, and make more confident strategic decisions. Contact us today to speak with a trusted advisor, because knowing where the economy is headed is useful, and knowing where your markets are headed is a competitive advantage.