14 (Not So Great) Charts You Need to See In the Industrials Sector

This note was originally published March 04, 2015 at 21:32 by Hedgeye Industrials Sector Head Jay Van Sciver.

Overview

Outside of housing/construction, much of the recent industrial data point to weakening activity.  Some of the deceleration may relate to broader deflationary trends, such as weaker resource-related capital spending.

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ISM New Orders

While still in expansion territory, both the Manufacturing and Nonmanufacturing New Orders readings weakened.

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Intermodal Rail Traffic

While weather and port disruptions play a part, the recent meaningful declines in intermodal rail traffic are the first since the great recession.

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U.S. Manufacturers New Orders


While we typically track the more timely ISM Manufacturing New Orders readings, other measures also point to a deceleration in orders.  Ex-Defense also shows YoY declines.

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U.S. Crude-By-Rail

Crude-by-rail volume showing slight year-on-year declines in recent weeks.

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Single Family Building Permits

Residential construction/housing appears to be positioned well into 2015.

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Architectural Billings Index


While the ABI points to strengthening activity through much of 2015, the recent 49.9 reading points to a deceleration into 2016.  Of course, by then no one will remember where ABI was 11 months prior.

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Public Nonresidential Construction Spending

After several years of being a drag on nonresidential construction, public sector spending is showing solid signs of growth.

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Inventory to Shipments Ratio

Inventory is building relative to shipments, which is typically a negative indicator for higher cost transportation spending.  It is also typically associated with weaker economic activity.

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IATA International Airfreight FTK Growth

Even airfreight growth seems to be slowing, which is surprising given recent declines in fuel costs. (Freight Ton Kilometers = FTK)

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Truck Demand Index

While some of this may be weather/port related, it is not a positive indicator for heavy trucks.

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US Truck Backlog to Build

From a trading perspective, we look to enter truck OEMs when this reading is low.  Recent slowing may portend an entry opportunity for that group.

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Brazil Heavy Truck Registrations

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CRB Index

A stronger dollar and deflationary trends are not typically favorable for Industrial top-lines.

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AWP Value Index


This series seems to be decelerating.  (AWP = Aerial Work Platforms)

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Business Jet Flights YoY%


Growth appears to be slowing in recent months, although the January decline may be partly weather related.

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China HSBC PMI

Ending on a more positive note, the HSBC China Manufacturing PMI has moved into positive territory.

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