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Economy in Brief

U.S. Industrial Production Edges Higher
by Gerald D. Cohen  March 15, 2019

Industrial production increased a less-than-expected 0.1% (3.5% year-on-year) during February following an upwardly revised 0.4% decline in January (was -0.6%). The Action Economics Survey forecast 0.4% growth in February.

Manufacturing activity fell 0.4% (+1.0% y/y) during February, though January was revised higher to -0.5% from -0.9%. Utilities output jumped 3.7% (9.0% y/y), as a result of a return to more seasonal weather. Meanwhile mining activity continued its upward trend rising 0.3% (12.5% y/y).

The decrease in manufacturing production was driven by a 0.7% drop in nondurables (unchanged y/y). Durable output declined 0.1% (+2.4% y/y) with motor vehicles down 0.1% (-3.2% y/y) and machinery falling 1.9% (+4.3% y/y). These were somewhat offset by computers and aerospace which were up 1.4% (5.6% y/y) and 1.1% (8.1% y/y) respectively. In the nondurable sector, petroleum & coal plummeted 5.2% (-0.9% y/y), chemicals fell 0.6% (+2.8% y/y), while food grew 0.3% (-1.4% y/y).

By market group, consumer goods output edged down 0.1% in February (+0.1% y/y). Business equipment dropped 1.0% (+3.7% y/y). Construction supplies declined 0.5% (+1.4% y/y). Materials gained 0.5% (5.9% y/y), with energy materials up 1.0% (10.8% y/y).

In the special aggregate groupings, production of high technology products was unchanged (3.7% y/y). Slight gains (0.1%) in semiconductor & electronic components (1.8% y/y) as well as computer & office equipment (-1.1% y/y) were offset by a 0.3% decline in communications equipment (+12.1% y/y). Factory sector production excluding the motor vehicle and high tech sectors declined 0.2% (+1.5% y/y).

Capacity utilization edged down to 78.2% in February, below the 78.5% expectations from Action Economics Survey. Factory sector use declined to 75.4% down 0.8 percentage point from December. Mining decreased to 94.6% after reaching a cycle high 95.2% in December. Growth in capacity in the manufacturing sector continues to accelerate, up a cyclical high 1.4% y/y in February

Industrial production and capacity data and US Population-Weighted Heating and Cooling Days are included in Haver's USECON database. Additional detail on production and capacity can be found in the IP database. The expectations figures come from the AS1REPNA database.

Industrial Production (SA, % Change) Feb Jan Dec Feb Y/Y 2018 2017 2016
Total Output 0.1 -0.4 0.1 3.5 4.0 1.6 -1.9
Manufacturing -0.4 -0.5 0.6 1.0 2.3 1.2 -0.8
    Consumer Goods -0.1 -0.7 -0.7 0.1 2.2 0.0 0.6
    Business Equipment -1.0 -0.2 0.9 3.7 3.0 3.2 -5.3
    Construction Supplies -0.5 0.0 1.6 1.4 3.3 2.5 0.9
  Materials 0.5 -0.5 0.2 5.9 5.9 2.0 -3.0
Utilities 3.7 -0.9 -5.2 9.0 4.3 -1.3 -0.4
Mining 0.3 0.3 1.4 12.5 12.7 6.4 -9.7
Capacity Utilization (%) 78.2 78.3 78.7 77.2 78.0 76.1 75.4
  Manufacturing 75.4 75.8 76.2 75.7 75.7 74.8 74.6
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