The above chart shows industrial production (factory output) over the past three years for communications equipment and semiconductors. The point of the chart is to show how these two sectors have held up during the current recession.
Communications equipment is interesting because it has held up very well throughout the current economic crisis (at least so far). This supports much of what I have been hearing from close friends in the communications industry. My good friend Dan C. who is the CEO of a large communications services company (and writes the Bear on Business website) has been telling me for months that demand for communications services is good. I’ll keep an eye on this in coming months to see if the trend continues. The chart does show communications equipment production turned slightly negative in February. However, we need to see another month or two of data before we can tell if a pattern is developing.
On a different note, industrial output for semiconductors and related components is in a bad pattern. Why is this important? Because semiconductors are widely considered a leading indicator of economic activity. This indicator is still negative for now.
Data Source:
> U.S. Federal Reserve. G.17 Industrial Production and Capacity Utilization. Various monthly reports.
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