The document summarizes recent economic indicators in the United States. Industrial production grew 1.0% in April, led by a rebound in oil production. However, automotive sales fell 11.1% for small cars and were flat for trucks. Housing starts decreased 2.5% in April but homebuilder confidence remains high. Ford plans to cut 10% of its global salaried workforce. Smart factories adopting new technologies could add $500 billion to the global economy over the next 5 years. Trump's $1 trillion infrastructure plan faces challenges attracting private investment due to uncertainties around funding models and revenue streams.

1. Industrial Output –
United States – April
2017
BY: PAUL YOUNG CPA, CGA
MAY 17, 2017

2. Paul Young - Bio
• CPA, CGA (1996)
• Academia (Public Finance, Advance
Accounting and Advance Management
Information Systems)
• SME – Risk Management
• SME – Close, Consolidate and
Reporting
• SME – Public Policy
• SME – Financial Solutions –
FOPM/FPM
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. USA – Industrial Capacity
Source – BMO – May 16, 2017
• Industrial production jumped 1.0% April,
more than double the consensus call and
the largest monthly move in three years!
The gain was greased by rebounding oil
production. The latter helped directly via
mining activity (up 1.2% in April) and
indirectly via the manufacturing of inputs
and capital goods involved in the process.
• Factory output was up a huge 1.0%, with
the sector also benefitting from the
rebound in business investment in
equipment and structures more broadly
(together they grew at a double-digit
annualized rate in Q1). Utilities output
also rose as April’s warmerthan-usual
temperatures cranked up more air
conditioners than they turned down
heaters

4. USA Automotive Sales – April 2017
Source - http://marketrealist.com/2017/05/us-auto-sales-fall-april-2017/
In April, small car sales in the
US continued to reflect
pessimism and fell 11.1% YoY
(year-over-year). Truck and
utility vehicle sales were flat and
fell 0.1% YoY. Weaker small car
sales along with stagnation in
truck and utility vehicle sales
were the primary reason for
lower US auto sales in April.

5. USA Housing Market – April 2017
Source – BMO – May 17, 2017
Looking ahead, there is room for growth.
Besides the usual list of support factors
(job growth, wage growth, steady
affordability), building permits are a
good indication of future starts. Sure they
fell 2.5% in April to 1.229 million units,
annualized, but that is still above the
level of starts. And homebuilders remain
very upbeat (the NAHB index is at its 2nd
highest level in 12 years). And with
demand still outpacing supply (still low
inventories of existing homes available to
be bought), that’s good news for future
starts

6. FORD to cut 10% of its salaried workforce
Source - https://www.bloomberg.com/news/articles/2017-05-16/ford-planning-to-cut-about-10-of-global-workforce-wsj-
reports
Ford Motor Co. plans to trim about 10 percent of its global
salaried workforce while retaining the tech talent it’s recruited
to develop driverless and electric cars, according to a person
familiar with the strategy.
Jobs are being cut as Ford’s directors pressure Chief
Executive Officer Mark Fields to boost profit and a lagging
stock price. The reductions are expected to target salaried
employees mostly in North America and Asia, said the person,
who asked not to be identified disclosing internal discussions.
Some are also expected in Europe, where Ford already has
retrenched

7. Smart Factory
Source - http://www.industryweek.com/technology/smart-factories-could-add-500-billion-global-economy-5-years?NL=IW-
07&sfvc4enews=42&cl=article_3&utm_rid=CPG03000001519274&utm_campaign=19325&utm_medium=email&elq2=c9a86b97
e69d42deab3f08894c1295c0
By now it is pretty much common knowledge that by using digital technologies like IoT, big data
analytics, AI, advanced robotics and 3D printing, manufacturers will increase not only efficiency
and productivity but revenues as well.
A new report, Smart Factories, by Capgemini’s Digital Transformation Institute found that some
sectors, in particular, have embraced these technologies in the form of smart factories. Industrial
manufacturing, aerospace and defense, and automotive and transportation are the specific sectors
that have ongoing smart factory initiatives.
These smart factories are a strong economic drive as they could add as much as $500 billion to $1.5
trillion in value to the global economy in five years, according to the report.
Manufacturers predict overall efficiency to grow annually over the next five years at 7 times the rate
of growth since 1990 . And the report estimates that smart factories can nearly double operating
profit and margin for an average automotive OEM manufacturer.

8. Infrastructure / USA
Source - http://www.cnbc.com/2017/05/12/why-the-road-to-trumps-1-trillion-infrastructure-investment-is-marked-with-
potholes.html
• The $1 trillion that President Trump wants to invest in U.S.
infrastructure by way of public-private partnerships may not be a slam-
dunk for investors.
• Amid a patchwork of decaying U.S. roads, bridges, schools and water
systems, an increasing share of municipal debt is being devoted to
shoring up these structures.
• Yet experts warn that, for a variety of reasons, most infrastructure
projects lack the revenue stream and return on equity needed to attract
private investors.

9. Summary
• USA capacity has expanded, but bulk of that expansion has been
led by Oil Production
• Automotive appears to be heading for a downcycle
• Housing starts are down the past few months. The impact of
softwood lumber duties has yet to impact the cost of housing
• Wage growth is stagnant
• Trump’s new $1 trillion infrastructure plan has yet to flow through
the economy