Hard constraints returning as economic bottlenecks

Tracking whether physical scarcity — energy, materials, grid equipment, and construction capacity — is binding on growth. The late 20th century trained people t Most recent data from today.

Exclude COVID

Demand

Manufacturing Production Index

Broad industrial output — the primary driver of electricity, materials, and infrastructure demand.

▼ -0.1% YoY

98.00Index

Trend YoY growth is -0.1%, slowing by 3 bps/year over the last 25Y. Deviations have remained above trend for 16 consecutive periods. Latest: +0.6%, 74 bps above trend, a 0.3σ deviation.

Level

YoY %

y = 0.7% 3 bps/yr · t

Deviation from trend

Total Construction Spending

Monthly pace of all U.S. construction — the dollar volume of physical buildout.

▲ +7.4% YoY

$2.2T

Trend YoY growth is +7.4%, accelerating by 24 bps/year over the last 25Y. Deviations have remained below trend for 24 consecutive periods. Latest: +1.0%, 6.4 pp below trend, a 1.0σ deviation. The latest YoY reading is boosted by 6.7 pp due to an easy comparison base from Jan '25.

Level

YoY %

y = 1.3% + 24 bps/yr · t

Deviation from trend

U.S. Infrastructure ETF (PAVE)

Market pricing of companies that build roads, bridges, power grids, and data centers.

▲ +26.5% YoY

$53.8

Trend YoY growth is +26.5%, accelerating by 2.2 pp/year over the last 8Y. Deviations have remained above trend for 51 consecutive periods. Latest: +49.9%, 23.4 pp above trend, a 1.9σ deviation. The latest YoY reading is boosted by 27.7 pp due to an easy comparison base from Apr '25.

Level

YoY %

y = 9.0% + 2.2 pp/yr · t

Deviation from trend

Critical Materials

Copper Miners ETF (COPX)

Copper is the metal of electrification — every EV, transformer, and data center needs it.

▲ +32.7% YoY

$86.1

Trend YoY growth is +32.7%, accelerating by 2.2 pp/year over the last 9Y. Deviations have remained above trend for 111 consecutive periods. Latest: +143.8%, 111.2 pp above trend, a 3.4σ deviation. The latest YoY reading is boosted by 49.3 pp due to an easy comparison base from Apr '25.

Level

YoY %

y = 12.7% + 2.2 pp/yr · t

Deviation from trend

Lithium & Battery Tech ETF (LIT)

Battery storage is the binding constraint on intermittent renewables and grid flexibility.

▲ +7.5% YoY

$81.9

Trend YoY growth is +7.5%, slowing by 2.6 pp/year over the last 9Y. Deviations have remained above trend for 178 consecutive periods. Latest: +135.1%, 127.6 pp above trend, a 4.6σ deviation. The latest YoY reading is boosted by 28.3 pp due to an easy comparison base from Apr '25.

Level

YoY %

y = 31.0% 2.6 pp/yr · t

Deviation from trend

Industrial Metals Fund (DBB)

Broad basket of aluminum, copper, and zinc — tracks aggregate materials scarcity.

▲ +8.3% YoY

$25.1

Trend YoY growth is +8.3%, accelerating by 6 bps/year over the last 9Y. Deviations have remained above trend for 109 consecutive periods. Latest: +43.6%, 35.2 pp above trend, a 3.8σ deviation. The latest YoY reading is boosted by 13.8 pp due to an easy comparison base from Apr '25.

Level

YoY %

y = 7.8% + 6 bps/yr · t

Deviation from trend

Grid & Equipment

Eaton Corp

Largest electrical equipment manufacturer — rising price signals power distribution demand outpacing supply.

▲ +36.2% YoY

$392.4

Trend YoY growth is +36.2%, accelerating by 2.3 pp/year over the last 9Y. Latest: +48.0%, 11.9 pp above trend, a 0.7σ deviation. The latest YoY reading is boosted by 46.0 pp due to an easy comparison base from Apr '25.

Level

YoY %

y = 15.3% + 2.3 pp/yr · t

Deviation from trend

Quanta Services

Largest U.S. power infrastructure contractor — order book reflects grid buildout pipeline.

▲ +61.7% YoY

$583.5

Trend YoY growth is +61.7%, accelerating by 4.8 pp/year over the last 9Y. Deviations have remained above trend for 48 consecutive periods. Latest: +118.6%, 56.9 pp above trend, a 1.7σ deviation. The latest YoY reading is boosted by 47.1 pp due to an easy comparison base from Apr '25.

Level

YoY %

y = 18.0% + 4.8 pp/yr · t

Deviation from trend

Iron & Steel Production Index

Steel is the backbone of all physical infrastructure — tracks domestic production capacity.

▲ +1.6% YoY

114.7Index

Trend YoY growth is +1.6%, accelerating by 3 bps/year over the last 25Y. Deviations have remained above trend for 12 consecutive periods. Latest: +7.5%, 5.9 pp above trend, a 0.8σ deviation. The latest YoY reading is boosted by 88 bps due to an easy comparison base from Feb '25. At current levels, YoY would fall to +6.7% by May '26 as comparisons tighten.

Level

YoY %

y = 1.0% + 3 bps/yr · t

Deviation from trend

Capacity

Capacity Utilization: Manufacturing

How much of existing factory capacity is in use — above 80% signals tightness and investment pressure.

▲ +0.3% YoY

75.2%

Trend YoY growth is +0.3%, accelerating by 3.5 pp/year over the last 25Y. Latest: -0.5%, 73 bps below trend, a 0.4σ deviation. The latest YoY reading is boosted by 73 bps due to an easy comparison base from Mar '25.

Level

YoY Change (bps)

y = −0.6% + 4 bps/yr · t

Deviation from trend

Nonresidential Construction Spending

Commercial and industrial building pace — the supply response to physical bottlenecks.

▲ +7.1% YoY

$1.2T

Trend YoY growth is +7.1%, accelerating by 18 bps/year over the last 23Y. Deviations have remained below trend for 24 consecutive periods. Latest: -0.1%, 7.1 pp below trend, a 0.8σ deviation. The latest YoY reading is boosted by 7.1 pp due to an easy comparison base from Jan '25.

Level

YoY %

y = 2.8% + 18 bps/yr · t

Deviation from trend