What It Measures
Industrial Production: Manufacturing (IPMAN) measures the real output of the U.S. manufacturing sector specifically, excluding mining and utilities. It includes:
- Durable Goods Manufacturing: Motor vehicles, machinery, computers, electronics
- Nondurable Goods Manufacturing: Food, beverages, chemicals, petroleum products, textiles
The index is based on NAICS classifications and uses 2017 as the base year (2017 = 100).
Why It Matters
Pure Manufacturing Signal: Unlike the broader Industrial Production index, IPMAN isolates factory output from volatile mining and utilities components.Economic Bellwether: Manufacturing activity often leads broader economic trends and is sensitive to business investment cycles.Trade Indicator: U.S. manufacturing output reflects both domestic demand and global competitiveness.Employment Driver: Manufacturing supports millions of jobs and has significant economic multiplier effects.
How to Interpret
Year-over-Year Changes: Focus on YoY changes to identify underlying trends, filtering out seasonal effects.Comparison to Total IP: If IPMAN diverges from total Industrial Production, mining or utilities are driving the difference.Durable vs Nondurable: Durable goods manufacturing is more cyclical; nondurable is more stable.
Key Levels to Watch
| Level | Interpretation |
|---|---|
| Above 105 | Strong manufacturing expansion vs 2017 baseline |
| 95-105 | Manufacturing near 2017 levels |
| Below 95 | Manufacturing output significantly below 2017 baseline |
Historical Context
U.S. manufacturing output has grown more slowly than the overall economy in recent decades as the U.S. has shifted toward services. The index fell sharply during the 2008 financial crisis and the 2020 pandemic but recovered to exceed pre-crisis levels.