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Industrial activity enjoys strong growth worldwide

Since hitting bottom in June 2009, US manufacturing production has risen at a 7.4% annual rate, and has now recovered about half the ground that was lost to the 2008-2009 recession. That still leaves a lot of room for improvement, but there is as yet no sign that the pace of growth has diminished. At the current rate, manufacturing production will have made a full recovery within the next 18 months.

As this next chart shows, U.S. industrial production has been growing at about the same robust pace as Eurozone industrial production since the end of the recession, with both up at about a 5% annual pace in the past six months. The recovery is proceeding at a decent pace almost everywhere, and there is no reason at this point to doubt that this will continue. To be sure, the level of industrial and manufacturing activity remains depressed relative to previous highs, but it is the change on the margin (which is proceeding at an above-average rate) that is the important thing to focus on. Things are getting better at a decent clip, and will likely continue to do so. There are lots of good things to look forward to.

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