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Wednesday, February 18, 2009

Industrial Production Shrank!

Federal Reserve Stat Release

Industrial production and Capacity Utilization fell by 1.8% in January from the last month and 10% from the previous year.

No surprise. If OPEC has enough brains to cut capacity to increase demand, so would the other industrial companies do so.

In any event, the issue of overall industrial capacity shrinking is not as cut and dry as OPEC, but, with a shrinking market and increasingly shrinking market, some people are going to go out of business before the stimulus package of the US kicks in.

In fact, the stimulus package is not geared for traditional manufacturing, in and of itself. But, not to discount the provisions for roads, schools and bridges in the stimulus package. We will just have to see how this pans out.

I guess all we have to say to manufacturing companies is to hold on. Hold on to what you have. Forget about Research and Development at this time. Even though the stimulus has provisions for that as well. The damage has been done and you have to wait until you get a whiff of the first bit of stimulus, to get back in the game.

It took too long to get this stimulus to the American industry. Took way too long. Should have been a little bigger, but not with all of the pork. The bill is cluttered with pork and that is what disgusts me with it.

But, in any event, what is done is done.
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