- by New Deal democrat
One of the biggest, if not the biggest, trend I have been writing about is the rebound in manufacturing that has been driven by AI data center construction. In that regard, industrial production, one of the four important monthly series that the NBER looks at in determining whether the economy is expanding or contraction, has been an important indicator of that upward trend, and that continued in September.
Headline production (blue) rose a sharp 0.7% to another post-pandemic high, and manufacturing production (red) rose 0.3%. And electric and gas utility production (gold, right scale), which is most closely aligned with AI data center construction, increased sharply against, by 3.5%. The below shows all three normed to 100 as of just before the pandemic:
Utility construction has outpaced the manufacturing sector as well as the headline number in the past few years, and continued to do so in September. On a YoY basis, while headline production was up 2.2% and manufacturing production up 1.1%, utility production continued to be up sharply, by 8.7%:
So the big news from industrial production is that AI data center construction continues to be the centerpiece of the manufacturing rebound since last year.
