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Economy in Brief

Factory Production Resumes Increase
by Tom Moeller December 15, 2009

Industrial production resumed the increase that began this past July. The November 0.8% gain followed an unrevised unchanged reading for October and it exceeded Consensus expectations for a 0.6% rise. The improvement from October was across-the-board but it was greatest in the construction supplies and in the materials areas. Output of consumer goods rose a moderate 0.3% and that was led by a 2.9% (-13.5% y/y) increase in furniture production and a 1.9% (-6.9% y/y) increase in motor vehicle output. Output of machinery also rose (-19.7% y/y) as did computers & electronics (-4.0% y/y) production. Less the motor vehicle & high-tech sectors output increased 0.8% (-5.1% y/y) last month.

During November, production increases amongst industries sagged somewhat to 52.9% of the total from the high of 60.6% during August. The breadth of increase from last July also dipped to a still-firm 59.9%, near the strongest since early-2007.

Capacity utilization rose further to 71.3%, its highest level since December. In the factory sector alone utilization rose to 68.4%. Utilization in the primary metals area has risen sharply to 59.1% with the rebound in output. There's also been a slight rise in utilization in the machinery area but it's down most elsewhere. The overall increase was caused by another estimated 0.1% (-0.9% y/y) decline in industry capacity.

The industrial production data are available in Haver's USECON database.

Industrial Production (SA,%) November October September Y/Y 2008 2007 2006
Total Output 0.8 0.0 0.5 -5.2 -2.2 1.5 2.3
  Manufacturing 1.1 -0.2 0.6 -4.8 -3.2 1.4 2.5
    Consumer Goods 0.3 0.1 1.0 -1.9 -2.6 0.9 0.4
    Business Equipment 0.5 -0.3 -0.4 -8.1 -1.1 2.7 9.4
    Construction Supplies 1.6 -1.6 -1.2 -12.5 -6.3 -2.0 2.3
    Materials 1.2 0.1 0.7 -4.8 -1.9 2.0 2.3
  Utilities -1.8 1.6 0.3 -5.1 0.3 3.4 -0.6
Capacity Utilization (%) 71.3 70.6 70.0 74.4 (Nov. '08) 77.5 80.6 80.9
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