The ASA Advisor, prepared monthly by ITR Economics for American Supply Association members, shows leading indicators, including the ITR Leading Indicator, the U.S. Conference Board leading indicator and the U.S. Purchasing Managers Index, signal the rate of growth for U.S. industrial production will peak later than previously expected.
ITR notes in the Advisor that it expects production to grow at an accelerating pace into the third quarter of 2018 instead of the second quarter.
ITR adds its prognostications for the years 2019 and 2020 remained unchanged with mild decline anticipated in 2019 and growth in 2020.
Also of note, ITR points out rising costs for labor and materials are contributing to slowing the pace of growth for U.S. corporate profits, which does not bode well for investment. ITR says falling demand for capital goods in 2019 will hinder industrial activity.
ITR says the 2019 recession will provide a good opportunity to grow businesses in the long term by building up cash reserves in the present in order to better-position to make acquisitions during the 2019 pessimism prior to valuations rising.
Also in the Advisor, wholesale trade is growing at an accelerating pace, up 7.6% compared to last year. U.S. wholesale trade of petroleum and petroleum products in the 12 months through February was up 23% from a year ago. ITR suggests planning for double-digit growth rates in petroleum-related trade into late 2018.
ITR reports the U.S. Rotary Rig Count has transitioned into a slowing growth trend, however the average count for the 12 months through March was up 67.4% compared to a year ago. ITR suggests evaluating capital equipment and technology needs as activity increases this year, but, it cautions, activity will not return to the 2014 peak this year.