- US: Advance Trade & Inventories (Feb)
- Sweden: Retail Trade, PPI, International Trade (Feb); Iceland: CPI (Mar)
- Turkey: International Reserves (Feb); Mauritius: Wage Rate Index, LFS (Q4); Saudi Arabia: Non-Oil Foreign Trade (Jan); Palestine: BOP (Q4); UAE: Fuel Prices (Apr); Israel: Construction Starts & Completions (Q4); South Africa: Construction Survey (Q1); Tanzania: Trade (Q4)
- Brazil: PPI (Feb)
- more updates...
Economy in Brief
Texas Factory Sector Activity Remains Strong
The Dallas Fed indicated in its Texas Manufacturing Outlook Survey that the General Business Activity Index eased during March...
EMU Money and Credit Growth Are Less Than Impressive Than Euro-PMIs
EMU nominal money supply growth is slightly higher over three months, but credit growth in the EMU is slower...
Durable Goods Orders Strengthened by Another Jump in Aircraft
New orders for durable goods rose 1.7% (5.0% y/y) during February...
Correction to Unemployment Insurance Weekly Claims
The Department of Labor has issued a correction to yesterday's annual revision to seasonally adjusted weekly unemployment claims...
EMU PMIs Are Off to the Races...Farewell Mediocrity?
The PMI rankings for the manufacturing and service sector PMIs in the EMU are suddenly off the chart...
U.S. New Home Sales Improve While Prices Decline
Sales of new single-family homes increased 6.1% (12.8% y/y) during February to 592,000 units (AR)...
by Tom Moeller August 19, 2016
Prices in the industrial sector are drawing support from the improvement in factory sector activity. Since December, manufacturing sector production has risen 0.6% following last year's 0.3% decline from December-to-December. That improvement has given life to industrial commodity prices. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.1% during the last four weeks, but remained up 1.9% during the last three months. A 4.8% increase in prices during the last twelve months follows sharp declines from 2012 to 2015.
Within the sector groupings of prices, the FIBER indexes showed increases in several categories. Prices were strong in the crude oil & benzene area. Including its recent spike to near $50 per barrel, the cost of WTI crude oil has roughly doubled from its February low. Prices for the petro-chemical benzene have risen by one-third since February. In the miscellaneous group, home building improvement raised framing lumber prices 4.8% last month and by 13.2% y/y. Prices for structural panels also gained 13.9% y/y. Natural rubber prices recovered by roughly one-third so far this year, following sharp declines since the 2011 high. Within the metals sector, pricing remained uneven. Aluminum prices improved 8.9% during the last three months and were 8.7% higher over the last year. Copper scrap prices moved 3.1% higher during the last three months, but were down 5.8% y/y. Steel scrap prices remained under pressure. A 15.1% decline during the last three months left them off 0.6% y/y. In the textile group, cotton prices declined 6.3% last month but were 4.5% higher versus last year. Burlap prices, however, were down by 3.0% m/m, and were off 4.0% y/y.
Over the near term, there may be further support coming for commodity prices. The current industrial output projection from the National Association for Business Economics (NABE) calls for a 0.6% decline in industrial production during all of 2016. That suggests that recent improvement in factory sector activity must be sustained to limit this year's overall weakness. The pricing environment next year may continue its recent improvement as factory output is expected to increase 2.2% during all of 2017. During the last ten years, there has been a 52% correlation between the three-month change in prices and the change in industrial output.
Commodity price data can be found in Haver's DAILY, WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.
|FIBER Industrial Materials Price Index (1990=100)||1-Mth %||3-Mth %||6-Mth %||12-Mth %||2015 %||2014 %||2013 %|
|Cotton (cents per pound)||-6.3||11.9||15.3||4.5||2.6||-24.2||10.8|
|Aluminum ($ per metric ton)||1.9||8.9||9.9||8.7||-19.2||9.4||-15.8|
|Copper Scrap (cents per pound)||-3.0||3.1||4.7||-5.8||-27.0||-12.0||-6.8|
|Steel Scrap ($ per ton)||1.6||-15.1||25.1||-0.6||-53.8||-18.6||8.4|
|Crude Oil & Benzene||2.7||3.2||24.3||2.7||-19.4||-26.5||0.8|
|Crude Oil (WTI, $ per Barrel)||2.3||-3.4||53.6||11.6||-35.8||-43.2||10.3|
|Framing Lumber ($ per 1000 board ft.)||4.8||2.8||17.9||13.2||-16.4||-1.6||3.5|
|Natural Rubber (cents per pound)||7.4||-2.8||30.3||19.5||-22.5||-32.3||-9.8|