Analysts at Nomura are forecasting a robust 0.9% m-o-m gain in US industrial production in June after a 0.1% decline in May.
Key Quotes
“June industrial production was likely boosted heavily by auto assemblies. In May, a fire at a parts supply factory disrupted auto production. Industry forecasts after seasonal adjustment suggest that automakers likely ramped up their production in June. That said, it is possible for auto production to revert to trend in July after an idiosyncratic jump in June. Excluding autos, we expect industrial production to rebound in June by around 0.4% m-o-m after a 0.2% decline in May.”
“The expected recovery would be consistent with our view that a sudden slowdown in May was likely transitory. Incoming business surveys suggest that business activity expanded at a steady pace, driven by healthy domestic demand, despite elevated trade uncertainties.”
“We expect June industrial production data to reflect this trend. In addition, mining sector output likely contributed solidly to total industrial production. Crude oil and liquid gas extraction has been on an upward trajectory, mostly driven by the shale oil sector. Elevated oil prices will likely remain supportive of mining sector output in the near term.”
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