Categories
Economics

Industrial Production and Capacity Utilization

The Philadelphia Branch of the Federal Reserve Bank released its September 2010 Industrial Production and Capacity Utilization report this morning. It is an interesting economic indicator, due to its frequency (monthly), timeliness (within a fortnight of the prior month-end), and long history of well-documented tracking, readily available from 1972 through the present.

The salient number, based on my review and recall from past days of buy-side proprietary trading of fixed-income securities, is the capacity utilization percentage. This is why:

  • Rising industrial production levels, in absolute terms, were driven by technological progress in manufacturing methods, more than increased economic activity.
  • The same can be said for capacity, although the Fed does provide helpful indexing as a percentage of the historical peak level in 2007.
  • Utilization is the percentage of actual capacity used for production, which indicates to me the level of demand  required for actual goods (not services!) and thus the demand for U.S.-manufactured industrial products, as a percentage of the maximum possible supply that could be produced.

The preliminary annualized utilization for September 2010 is 74.7% of capacity. This is well below the yearly average of 80.6% from 1972 through 2009. However, utilization of capacity has increased from the 2008-2009 low of 68.2%, as well as the September 2009 value of 70.5%. While I feel some concern about the economic situation in the immediate months ahead, it is encouraging to note the breakdown by process stage:

  • For crude production, the operating rate increased 0.7% points to 86.9%, almost half a point higher than the 1972 to 2009 average
  • For primary and semi-finished stages, utilization declined 0.6% points, to 71.5%, about 10.1% points below the long-run average
  • For the finished stage, utilization decreased 0.1% points to 73.8%, about 3.7% points below the long-run average

If crude production rates drive primary, semi-finished and finished stages, then the more historically comparable rates of crude manufacturing will perhaps carry through into the later stages of production in the next three manufacturing reports of the fourth quarter of 2010.

*Note that for the purposes of this Federal Reserve Statistical Release, the industrial sector is comprised of manufacturing, mining, electric and gas utilities, as well as the logging, newspaper, periodical, book, and directory publishing industries.

Categories
Tech

Microsoft Tag at the Crossroads of Virtual and Physical Worlds

Will Microsoft clear the field as it enters the location-based service market? Microsoft provides this definition of Tag, whose scope is larger than I realized:

“A Tag is a high-capacity color bar code… Organizations and individuals can create specific Tags by using the Microsoft Tag Manager Web service. When the Microsoft Tag Reader application is installed on a mobile device, [it] can be used to scan a Tag using the built-in device camera. When a Tag is scanned by the Tag Reader, the information encoded into the Tag becomes available on the mobile device.”

Categories
Tech

HTML 5

What is HTML5?

Earlier this weekend, Christopher Blizzard wrote about how there’s not one easy answer as to what HTML5 actually is. While I don’t agree with placing all of the blame on Google, I certainly agree that there needs to be a simple answer as to what, “support HTML5!” means. Not just for browser vendors, but for website owners as well.

via davidrecordon.com

This needs to accompany the giant “WTF is HTML” chart and commentary I posted last week. However, this is written by an expert, a very knowledgable person, David Recordon.

Categories
Tech

Open Data Standards

My response to Rhiza Labs CEO Josh Knauer:  On open government data, Tim Berners-Lee is almost rightI just watched the Gov 2.0 Expo video (May 27, 2010 in London, UK) featuring Tim Berners-Lee advocating government data standards, and your response [Rhiza Labs’ Mr. Josh Knauer, see link to site above] that followed. I am a working practitioner of data standardization and transparency in data policy, and wanted to express my agreement with your commentary.