A Fundamental Industrial Production Index
The Thomas Manufacturing Index, or “TMX”, is a new index that measures industrial activity in the United States and Canada. Every day thousands of engineers, procurement professionals, and logistics companies use Thomasnet.com to source suppliers and partners, download product specifications, and submit requests for proposals. These tens of thousands of daily actions are fundamental to industrial production and represent a true measure of the health of the manufacturing sector.
TMX is built with anonymized first-party data representing a highly diverse set of companies including Fortune 1,000, Mid-Market, and SMBs. This depth and breadth of coverage makes TMX one of the most powerful financial and economic forward indicators to date.
How to Interpret the Index
TMX leads the stock market when industrial activity is driven by long term investments or major shifts in the manufacturing sector.
Conversely, the index lags the market when there are sustained sharp upward or downward trends in stock prices. This is particularly the case when the market is in an investment regime where sourcing is highly impacted by the availability of capital. As a manufacturing sector fundamentals index, TMX sheds light on key dynamics that drive market performance.
Occasionally, some extraordinary events such as trade conflicts or the coronavirus outbreak result in major disruptions in the supply chain. In these particular cases, TMX was an early indicator as it temporarily diverged from the market.
It should be noted that industrial activity in North America is highly cyclical by nature and includes significant dips during the holiday season and major spikes in the summer.
Events Significantly Impacting Industrial Activity in 2019 & 2020
In 2019 and into 2020, industrial activity has been largely impacted by trade conflicts with China and, more recently, by uncertainty stemming from the Coronavirus outbreak. These two events markedly disrupted global supply chains, slowing overall production while producing spikes in demand for specific product categories such as steel, prefabricated building materials, surgical masks, and shadow kitchen equipment.
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