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Economy in Brief

U.S. Industrial Production Stabilizes; Factory Output Declines for Three Straight Months
by Tom Moeller  March 16, 2015

Industrial production ticked 0.1% higher during February following declines in three of the four previous months. January production fell 0.3%, earlier reported as a 0.2% rise. The latest gain was helped by cold winter temperatures prompting a 7.3% rise (1.2%) in utility output. Manufacturing sector production declined 0.2% (+3.4% y/y). That followed a 0.3% January shortfall, revised from +0.1%, and a 0.1% December slip. A 0.2% rise in total output was expected in the Action Economics Forecast Survey.

Consumer goods production increased 1.0% last month (2.2% y/y). Nondurable consumer goods output was boosted 1.8% (1.8% y/y) by a 7.5% surge (0.4% y/y) in consumer energy products. Chemical products output was unchanged (+5.7% y/y) but clothing production fell 2.3% (+3.6% y/y). Durable consumer goods production declined 1.5% (+3.8% y/y) as motor vehicle & parts production was off 3.0% (+2.9% y/y). Machinery production fell 0.4% (+4.5% y/y) and furniture output slipped 0.1% (+9.0% y/y). Business equipment production fell 0.3% (+4.0% y/y) as industrial equipment output fell 0.6% (+3.1% y/y) and information & processing production slipped 0.2% (+5.1% y/y). Construction supplies output fell 0.3% (+4.1% y/y) and mining production declined 2.6% (+5.3% y/y).

Within the special aggregate series, high technology industries production fell 0.2% (+4.5% y/y), off for the third straight month. Computers & office equipment output dropped 3.7% (-1.4% y/y), also down for three consecutive periods. Communications equipment production was off 0.7% (+5.0% y/y). Factory sector production excluding the high-tech sector fell 0.2% (+3.4% y/y), the same as during the prior two months. Manufacturing production excluding both high-tech and autos remained unchanged (0.3% y/y) following two months of slight decline.

The capacity utilization rate slipped to 78.9% and remained below the recovery high of 79.8% reached in November. In the factory sector, the capacity utilization rate fell to 77.3%, its lowest since October. Total industry capacity rose an improved 3.1% y/y while factory sector capacity increased 2.1% 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) Feb Jan Dec Feb Y/Y 2014 2013 2012
Total Output 0.1 -0.3 -0.2 3.4 4.2 2.9 3.8
Manufacturing -0.2 -0.3 -0.1 3.4 3.5 2.7 4.1
  Consumer Goods 1.0 -0.1 -0.7 2.2 2.8 2.4 1.7
  Business Equipment -0.3 0.4 -1.3 4.0 5.2 3.6 7.5
  Construction Supplies -0.3 -1.0 1.0 4.1 4.2 4.2 4.6
Materials -0.3 -0.4 0.3 4.7 5.1 3.2 4.5
Utilities 7.3 0.9 -5.0 1.2 1.3 2.1 -2.1
Capacity Utilization (%) 78.9 79.1 79.4 78.6 79.1 78.0 77.3
 Manufacturing 77.3 77.6 77.9 76.4 77.2 76.1 75.5
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