Soft Rebound in Industrial Production Suggests Bigger Problems Than Weather

Manufacturing is supposed to be booming right now. A key bellwether for the sector, the ISM manufacturing index, rose to 64.7 in March—its highest since the 1980s. Against that backdrop, you would expect to see a surge in output, yet the increase for manufacturing output in March was just 2.7%, which is not even enough to fully offset the 3.7% decline in February. We had argued last month that the softness in the February data was about more than just weather. As we describe below and have tackled in recent reports, supply chain constraints are standing in the way of a more robust rebound in manufacturing. Production may be picking up, but it is still not high enough to satiate demand. Inventories climbed in February, but businesses across the supply chain are still struggling to restock.   READ FULL ARTICLE>>