THE BASIS POINT

Fundamentals 10/17: Manufacturing Down 5th Month

Industrial Production/Capacity Utilization (September 2011)
– Industrial Production was +0.2%
– Previous was +0.2%, consensus +0.2%
– Capacity Utilization was 77.4%
– Previous was 77.4%. Consensus was 77.5%.

Empire State Manufacturing Survey
-Index was -8.48 vs. -8.82 last month
-0 is dividing line between expansion and contraction
-Fifth straight monthly contraction
Full report
-Upper New York State (where manufacturing used to be) is a place where the economy has been ravaged by high property taxes. If you make a list of property tax rate by county, 14 of the 15 highest rates are in New York State. In 1978 California voters passed Proposition 13. San Francisco instantly cut its property tax rate by 57%. Within 4 years inflation adjusted revenue to SF was 2/3’rds higher than before Prop 13.