MNI DATA PREVIEW: April IP Seen Flat; Soft Manufacturing Key

By Kevin Kastner

     WASHINGTON (MNI) - Industrial production is expected to hold steady in the

April report to be released on Wednesday, with manufacturing production expected

to be flat. Utilities production is expected to decline while mining production

could see a small rebound, leaving the headline reading unchanged for the month.

--UNDERESTIMATE POSSIBLE FOR APRIL 

     Analysts misses in the MNI survey in April have been slightly tilted toward

underestimates in the last 10 years, with upside surprises in each of the last

three years. At the same time, analysts overestimated the headline reading every

month to this point in 2019, so it is possible that the flat expectation for

April reflects cautiousness on the part of analysts to not undercut the headline

figure again.

--MANUFACTURING DATA SOFT 

     The manufacturing data for April were generally unfavorable for

manufacturing production to rebound from the flat reading posted in March.

Factory payrolls rose by only 4,000 in April, while auto production jobs fell by

2,000 and the factory workweek was unchanged at 40.7 hours. Additionally, the

ISM production index fell to 52.3 in the current month from 55.8 in the previous

month.

--UTILITIES DIP

     The transition from cool winter weather to warmer summer weather is likely

to be seen in April. However, a reversal of natural gas usage after three very

strong gains is not likely to be met by an equal air conditioner boost, as

temperatures rose modesty except in some warmer pockets. As a result, utilities

production as a whole is likely to be near flat for a second straight month.

--MINING UP SLIGHTLY

     After three weak readings, mining production is likely to find its footing

in April as preparation for the summer driving season begins and post a small

increase. After three weak readings, mining production is likely to find its

footing in April as preparation for the summer driving season begins and post a

small increase. However, any gain in output will come from oil production as the

Baker Hughes rig count showed a decline in active rigs in the US to 1,012 from

1,023 in the previous month despite rising prices.

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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