From the American Supply Association’s Advisor, which is produced exclusively by ITR Economics each month for ASA members, U.S. real gross domestic product was up 2.3% through the third quarter of 2017 on a year-over-year basis.
ITR says the pace of growth is increasing and is benefiting from accelerating growth in the industrial economy. ITR notes U.S. industrial production for the 12-month period ending November 2017 was up 1.6%. Accelerating growth in the manufacturing (plus 1.4%) and mining (plus 5.3%) segments is driving the growth rate, ITR reports.
ITR predicts U.S. industrial production will grow at an accelerating rate into the first half of 2018, supported by increasing activity in manufacturing, mining and electric and gas utilities. ITR adds economic expansion will persist through the remainder of 2018, but the pace will diminish during the latter part of the year.
ITR suggests now is the time to make a move. “Production will expand in 2018,” the firm notes in the Advisor. “Ensure quality control keeps pace with the growing volume expected throughout the year. High quality can be marketed as a competitive advantage to your clients, whereas subpar production can cause lasting damage to your brand.”
In terms of its long-term economic outlook, ITR still predicts slowing growth overall in 2018 and a mild recession in 2019.
In other Advisor highlights, the average annual drilling activity through November 2017 was up 62.3% on a year-over-year basis. The rig count, ITR says, likely will be stable into 2019 as oil and gas demand is expected to remain stable. ITR suggests expanding credit to worthy customers to capture a larger market share.
Additionally, ITR indicates total wholesale trade is in an accelerating growth trend. Wholesale trade of petroleum and petroleum products is accelerating, up 26.8% on a year-over-year basis, it says. Oil prices, ITR adds, are supporting the dollar-denominated value of these goods. ITR says to plan for both rising activity and costs in 2018.