Aerospace Production Poised for Growth in 2015
Aerospace industrial production grew at a decelerating rate throughout 2013 and into the first half of 2014, but that trend has reversed and it has grown at an accelerating rate since July. Current production levels are virtually at their peak since late 2007 and early 2008, and the growth rate should continue to accelerate. A significant reason for this is that system revenue passenger miles also have grown at an accelerating rate since April 2013. Based on past trends, aerospace industrial production should continue to grow faster throughout 2015.
In September, our aerospace business index, which grew in three of the previous five months, reached its second highest level since September 2012. New orders grew at their fastest rate since January, and backlogs also increased in three of the last five months, which indicates that capacity utilization within the aerospace manufacturing industry should be rising. However, because of the rising dollar, exports are contracting at a significant rate.
Growth in Packaging to Moderate
Packaging is closely tied to the production of consumer goods, so following trends in consumer goods production will provide an indication of what is happening in the packaging industry.
At the time of our last update in April, consumer goods production had been improving noticeably. Since then, production has reached its highest level since January 2008, and its current rate of annual growth is the fastest since February 1999. This should indicate significant demand for new molds.
However, it appears that the rate of growth in consumer goods production, and consequently, the use of packaging, will soon level off or even decelerate. This is because the rate of growth in consumer spending, which leads consumer goods production by three to six months, has been flat since the fall of 2013. The rate of growth in consumer goods production has shot above the rate of growth in consumer spending, which is a historical rarity. Therefore, it is likely that consumer goods production will see noticeably slower growth sometime in the first half of 2015.