Recent Updates
- Japan: Loans and Discounts Outstanding (Jan)
- Korea: Regional CPI (Feb)
- Korea: GDP (Q4), CPI (Feb)
- New Zealand: Tax Revenue and Receipts (Jan)
- more updates...
Economy in Brief
U.S. ISM Services Index Weakens in February
The ISM Composite Index of Services Activity declined to 55.3 during February...
U.S. Mortgage Applications Edge Up
The MBA Mortgage Loan Applications Index edged up 0.5% w/w (5.4% y/y) in the week ended February 26...
Global PMIs Show Ongoing Struggle with Growth Global PMIs Show Ongoing Struggle with Growth
While manufacturing climbs higher, the services sector remains stuck...
U.S. Light Vehicle Sales Weaken in February
Sales of light vehicles declined 5.6% during February (-6.7% y/y) to 15.88 million units...
U.S. Gasoline & Crude Oil Prices Continue to Strengthen
The price of regular gasoline strengthened to $2.71 per gallon (11.9% y/y) in the week ended March 1...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen January 17, 2020
• Industrial production declined 0.3% in December on a weather-driven drop in utility output.
• Manufacturing output rises 0.2% as a 4.6% contraction in vehicles is offset by gains in other durables as well as nondurables.
• Capacity utilization in the manufacturing sector edges up to 75.2%; well below year-ago cycle peak of 77.3%.
Industrial production decreased a weaker-than-expected 0.3% in December (-1.0% year-on-year) following offsetting revisions to October and November -- now -0.5% and 0.8% revised from -0.9% and 1.1% respectively. The Action Economics Survey forecast a 0.1% decline in December. On an annual average basis, industrial production was up 0.8% y/y in 2019, the weakest annual growth since 2016.
Manufacturing activity increased 0.2% (-1.3% y/y) during December, with a slight downward revision to November (now 1.0% versus 1.1%). This is the largest December-to-December decline since 2015; annual average output edged down 0.2%. Utilities production fell 5.6% (-1.9% y/y), as much warmer-than-normal weather in December decreased demand. U.S. population-weighted heating was 101 degree-days below normal; over the last ten years, the mean for this statistic was -26 degree-days per month. Meanwhile mining activity rose 1.3% (1.4% y/y).
Manufacturing of durable goods declined 0.2% (-1.3% y/y) in December, with motor vehicles dropping 4.6% (-8.3% y/y). Machinery output edged up 0.1% (-3.8% y/y), while computer and electronics gained 1.4% (7.0% y/y). Aerospace production rose 0.8% (0.7% y/y). Nondurable output increased 0.6% (-1.2% y/y) as food production jumped 1.3% (2.1% y/y). Production of chemicals, the other major non-durable category, was unchanged (-2.8% y/y).
Output of business equipment, an indicator of capital spending, edged down 0.1% in December (-1.9% y/y). In the special aggregate groupings, production of high technology products, which is now less than 2% of total output, increased 1.1% (8.0% y/y). Factory sector production excluding the motor vehicle and high tech sectors rose 0.6% (-1.1% y/y), but is still 11% below its 2007 peak.
Capacity utilization declined to 77.0% in December from a slightly upwardly-revised 77.4% (was 77.3%). The Action Economics Survey expected 77.1%. Factory sector use edged up to 75.2% but is still down 2.1 percentage points from December 2018's cyclical peak. Utility utilization fell to 73.5%, the second weakest on record (data began in 1967); February 2017, which was even warmer than normal, holds the record low of 71.5%. Capacity in the manufacturing sector grew 1.4% y/y, the first month it has surpassed its 2008 peak.
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) | Dec | Nov | Oct | Dec Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Total Output | -0.3 | 0.8 | -0.5 | -1.0 | 0.8 | 3.9 | 2.3 |
Manufacturing | 0.2 | 1.0 | -0.7 | -1.3 | -0.2 | 2.3 | 2.0 |
Durable Goods | -0.2 | 2.2 | -1.2 | -1.3 | 0.7 | 3.4 | 2.2 |
Motor Vehicles | -4.6 | 12.8 | -5.7 | -8.3 | -2.2 | 4.1 | 0.0 |
Selected High Tech | 1.1 | 1.4 | -0.1 | 8.2 | 5.0 | 6.4 | 2.6 |
Nondurable Goods | 0.6 | -0.1 | -0.2 | -1.2 | -0.8 | 1.9 | 1.9 |
Utilities | -5.6 | 1.0 | 0.4 | -1.9 | -1.1 | 4.4 | -0.8 |
Mining | 1.3 | -0.2 | -0.5 | 1.4 | 7.1 | 12.4 | 7.4 |
Capacity Utilization (%) | 77.0 | 77.4 | 76.9 | 79.5 | 77.8 | 78.7 | 76.5 |
Manufacturing | 75.2 | 75.1 | 74.5 | 77.3 | 75.6 | 76.6 | 75.1 |