IDX remains significantly up in major categories
As of May 2014, WSD’s industries activity index (IDX) index was up 5.2% year-to-year, which compares to a 6.7% rise in December 2013 and a 3.6% increase for all of 2013. The CES (short-lead-time capital goods index) was up 7.0% year-to-year, the CEL (long-lead time capital goods index) was up 6.3%, and the CDIDX (consumer goods index) was up 2.1%. The CES portion of the index, accounts for about 50% of the weight of the IDX.
Since 2007, the largest year-to-year decline for the index was 30.3% in May 2009, while the biggest year-to-year gain was 13.6% in April 2012.
The IDX figures provide support to the concept that, at least for the moment, the USA is the economy, and the USA steel market is the market, whose near-term outlook is better than most others.
From 2008 to 2011, all components of the IDX underwent extreme year-to-year volatility. For example, in late 2009, the long-lead time capital goods index, which tends to lag the others, was down about 30%; the consumer goods index was down just over 40%; while the short-lead time capital goods index was down about 37%. In the summer of 2010 on a year-to-year basis, the long-lead time capital goods index was still down 25%; but, the consumer goods index was up about 55% and the short-lead time capital goods index was up almost 30%. Presently, on a year-to-date basis, the three IDX components are all up 4% to 7%.
Reasons for a possible further price decline this year as well as factors impacting the price longer-term include:
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