Bloomberg writes that a pandemic reset has greatly improved the outlook for the industrial sector with several key indicators revealing it’s not only underway, but accelerating.
Bloomberg’s markets columnist, Brooke Sutherland, says, “The S&P 500 Industrial Index is trading almost 20% higher than where it ended 2019. U.S. manufacturing activity expanded in February at the fastest pace in three years, according to Institute for Supply Management data. Copper prices, a key indicator of industrial demand, are near a decade high. CEOS at companies including 3M Co., Stanley Black & Decker Inc. and Caterpillar Inc. are spending like there’s no pandemic. By almost every measure, the industrial recovery is well underway and accelerating. It’s remarkable when you stop and think about it.”
“In manufacturing, the speed and strength of the snapback in demand from the desolate levels of last spring is wreaking havoc on supply chains and sparking concerns about rising costs for raw materials, freight and labor costs,” writes Sutherland. “But CEOs at large manufacturing companies have been surprisingly sanguine when queried about inflation and have expressed confidence they can offset increasing costs with price hikes of their own.”
He concludes, “These are good problems to have in the scheme of things. It’s easy to forget after the events of last year, but before the pandemic, the industrial sector was looking at a pretty pokey 2020.”
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