The industrial sector shows continued resilience as of February 2026, with the production index reaching a 12-month high of 102.55. Despite broader market volatility, the core manufacturing engine remains in expansion territory, supported by steady month-over-month gains. This environment reflects a trend-like growth phase where output is finally surpassing pre-pandemic benchmarks by over 1%.
| Metric | Value |
|---|---|
| Industrial Production Index | 102.55 |
| Month-over-Month | +0.15% |
| 3-Month Change | +1.17% |
| Year-over-Year | +1.50% |
| 12-Month High | 102.55 |
| 12-Month Low | 100.97 |
| vs Pre-Pandemic (Feb 2020) | +1.16% |
Industrial production rose 0.15% in February, pushing the year-over-year growth rate to 1.50%. The current index level of 102.55 sits at the top of its 12-month range, indicating a sustained upward trajectory. Notably, production has now climbed 1.16% above the pre-pandemic levels recorded in February 2020. This steady climb suggests that the industrial base has successfully navigated recent headwinds to establish a new baseline for growth.
| Component | MoM | YoY |
|---|---|---|
| Manufacturing | +0.03% | +1.62% |
| Durable Goods | -0.07% | +2.72% |
| Nondurable Goods | +0.13% | +0.45% |
| Mining | +1.66% | +2.45% |
| Utilities | -0.40% | +0.03% |
Growth is being primarily driven by the durable goods sector, which posted a robust 2.72% year-over-year increase. Mining also showed significant strength with a 2.45% gain, while nondurable goods and utilities remained nearly flat. Manufacturing as a whole grew 1.62% YoY, though this was achieved despite a slight contraction in manufacturing employment. This divergence suggests productivity gains or automation may be offsetting the 0.7% decline in the manufacturing workforce.
Total capacity utilization stands at 76.3%, a level characterized as normal and indicating neither excessive slack nor immediate inflationary bottlenecks. Manufacturing utilization is slightly lower at 75.5%, suggesting that factories have room to scale production without immediate capital expenditure pressure. This Goldilocks utilization rate implies that the economy is not overheating, providing a stable backdrop for corporate margins. However, the lack of tightening suggests that massive new investment in capacity may not be an immediate priority for most firms.
The Chicago Fed National Activity Index printed at +0.18, signaling that the economy is growing at its long-term trend. While the headline figure is positive, the diffusion index and the three-month moving average both sit at -0.06, indicating some underlying dispersion in growth across sectors. Historically, when the CFNAI is near this level, the S&P 500 has seen a median three-month forward return of +4.4%. This suggests that while the current momentum is modest, it has historically been a favorable environment for equity markets.
| Horizon | Median | Positive % |
|---|---|---|
| 3 Months | +4.4% | 84% |
| 6 Months | +9.1% | 82% |
| Sector | 1M | vs SPX | YTD |
|---|---|---|---|
| Energy (XLE) | +7.3% | +9.2% | +29.5% |
| Utilities (XLU) | +4.4% | +6.4% | +10.7% |
| Communication (XLC) | +0.6% | +2.6% | -2.0% |
| Technology (XLK) | -0.3% | +1.6% | -3.6% |
| Real Estate (XLRE) | -0.7% | +1.3% | +5.5% |
| S&P 500 (SPY) | -1.8% | +0.2% | -1.9% |
| Health Care (XLV) | -3.2% | -1.2% | -2.4% |
| Cons Disc (XLY) | -3.4% | -1.4% | -6.0% |
| Industrials (XLI) | -3.9% | -1.9% | +7.1% |
| Financials (XLF) | -4.6% | -2.7% | -10.0% |
| Cons Staples (XLP) | -4.7% | -2.8% | +9.4% |
| Materials (XLB) | -6.5% | -4.5% | +8.9% |
The industrial production data presents a mixed bag for equity investors, as manufacturing-sensitive sectors like Industrials and Materials have recently underperformed the broader market. Despite the 1.50% YoY growth in production, the XLI and XLB sectors fell 3.9% and 6.5% respectively over the last month. However, the historical 84% win rate for the S&P 500 following similar CFNAI readings provides a bullish counter-narrative. Investors must weigh current sector-level weakness against the broader trend of industrial expansion.
| Stock | Price | 1M | 6M | 1Y | YTD | VS S&P 500 |
|---|---|---|---|---|---|---|
| CVX Chevron | $196.84 | +9.0% | +25.3% | +31.1% | +29.2% | +10.9% |
| SO Southern Company | $99.11 | +7.9% | +7.4% | +12.4% | +13.7% | +9.9% |
| XOM ExxonMobil | $157.23 | +4.9% | +40.2% | +47.4% | +30.7% | +6.8% |
| NEE NextEra Energy | $92.82 | +1.0% | +29.6% | +29.7% | +15.6% | +2.9% |
| HON Honeywell | $234.51 | -2.2% | +10.9% | +14.6% | +20.2% | -0.3% |
| GE GE Aerospace | $304.00 | -2.8% | +8.1% | +58.4% | -1.3% | -0.9% |
| FCX Freeport-McMoRan | $57.93 | -6.6% | +30.0% | +55.9% | +14.1% | -4.7% |
| CMI Cummins | $545.03 | -7.4% | +32.8% | +76.1% | +6.8% | -5.5% |
| ETN Eaton | $361.04 | -7.5% | -1.1% | +28.4% | +13.4% | -5.6% |
| CAT Caterpillar | $699.78 | -7.7% | +62.6% | +112.3% | +22.2% | -5.8% |
| EMR Emerson | $133.09 | -7.9% | -1.5% | +22.9% | +0.3% | -5.9% |
| GM General Motors | $72.95 | -8.7% | +24.7% | +55.7% | -10.3% | -6.8% |
| STLD Steel Dynamics | $174.28 | -12.6% | +33.9% | +43.0% | +2.9% | -10.7% |
| NUE Nucor | $162.74 | -13.8% | +15.6% | +27.2% | -0.2% | -11.9% |
| F Ford | $11.71 | -15.5% | +1.4% | +27.8% | -10.7% | -13.5% |
| CLF Cleveland-Cliffs | $8.61 | -20.0% | -26.3% | -11.5% | -35.2% | -18.0% |
Given the strong performance of Energy and Utilities amid broader market weakness, a defensive tilt remains prudent in the short term. The strength in durable goods suggests that high-quality industrial names with exposure to long-cycle projects may offer better resilience than materials. Investors should monitor the 12.6M manufacturing employment level for further signs of softening that could impact consumer demand. Overall, the data supports maintaining core equity exposure while favoring sectors with positive momentum like Energy.