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Economy in Brief

U.S. Industrial Production Gain is Led by Autos & High-Tech
by Tom Moeller  September 16, 2013

Factory sector activity is showing renewed life. Industrial production gained 0.4% during August (2.7% y/y) following an unrevised no-change in July. A 0.5% rise had been expected in the Action Economics survey. Factory sector production increased an even firmer 0.7% (2.7% y/y) following downwardly revised readings of little-change during the prior two months. Utility output fell 1.5% (-3.9% y/y).

Consumer goods production nudged up 0.2% last month (2.3% y/y) on the strength of a 5.2% rise (8.4% y/y) in motor vehicle output. Elsewhere, production of furniture and appliances increased 2.0% (5.3% y/y) while production of computers, video & audio equipment rose 0.5% (0.7% y/y). In the nondurables sector, clothing output jumped 1.2% (4.2% y/y). Offsetting all of these gains was a 0.9% decline (+0.1 y/y) in chemical products production and a 0.3% drop (-0.7% y/y) in paper products output.

Business equipment output recovered 1.0% (2.5% y/y). Production of transit equipment production surged 3.6% (4.0% y/y) and made up a July decline. Information processing equipment output gained 1.1% (3.6% y/y). Production of high-tech products rose 1.7% (9.9% y/y) led by a 2.2% rise (12.4% y/y) in semiconductors & related equipment. Working the other way, output of industrial equipment slipped 0.2% (+1.5% y/y). Excluding the output of high tech products & motor vehicles, factory production gained 0.3% (1.8% y/y) during August and recovered a 0.2% July dip.

The capacity utilization rate nudged up to 77.8% from 77.6% in July. In the factory sector, the rate also moved up to 76.1%. The electrical equipment industry is producing at 81.3% of capacity while the motor vehicle industry is at 76.3%. Also, the apparel industry is producing at 72.4% of capacity. Overall industry capacity rose 1.8% y/y last month while factory sector capacity increased 1.5% y/y.

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The expectations figure is in the AS1REPNA database. 

Industrial Production (SA, % Change) Aug Jul Jun Aug Y/Y 2012 2011 2010
Total Output 0.4 0.0 0.1 2.7 3.6 3.3 5.7
Manufacturing 0.7 -0.4 0.3 2.7 3.9 3.4 6.1
  Consumer Goods 0.2 -0.4 0.3 2.3 1.6 1.5 1.1
  Business Equipment 1.0 -1.0 0.8 2.5 8.3 5.6 8.3
  Construction Supplies 0.4 0.4 0.7 5.3 5.2 3.0 3.6
Materials 0.4 0.6 -0.1 3.3 4.1 4.7 8.8
Utilities -1.5 -1.2 -2.0 -3.9 -2.1 -0.2 3.6
Capacity Utilization (%) 77.8 77.6 77.8 77.2 77.6 76.5 74.0
 Manufacturing 76.1 75.7 76.1 76.0 75.8 74.0 71.3
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