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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller October 18, 2021
• Hurricane damage continues to restrain activity.
• High-tech sector remains strong.
• Capacity utilization tumbles.
Industrial production declined 1.3% (+4.6% y/y) during September following a 0.1% August dip, revised from +0.4%. The Fed indicated that almost half of the decline in output was due to damage caused by Hurricane Ida. The decline compared to a 0.2% rise expected in the Action Economics Forecast Survey. Manufacturing output fell 0.7% last month (+4.8% y/y) after declining 0.4% in August, revised from +0.2%. The Fed reported that the lingering effects of Ida contributed 0.3 percentage point to the September decline.
Durable goods production fell 0.5% (+5.6% y/y) after a 0.8% fall. Motor vehicle production fell 7.2% (-13.7% y/y) following a 3.2% decline. Excluding the motor vehicle sector, factory output declined 0.3% (+6.2% y/y) after a 0.2% slip. Elsewhere in the durable goods sector, high-tech product production rose 0.6% (10.7% y/y) after holding steady in August. Production of electrical equipment, appliances & components rose 1.3% in September (10.4% y/y) and mostly recovered August's 1.6% decline. Machinery output edged 0.2% higher (8.7% y/y) after falling 1.0% in August. Output of computers & electronic products slipped 0.1% (+11.0% y/y) after rising 0.4% in August. Primary metals production rebounded 1.1% in September (13.4% y/y) after a 1.3% drop while fabricated metals output rose 0.3% last month (3.8% y/y) after a 0.4% gain.
In the nondurable goods sector, production weakened 1.0% (+4.6% y/y) after improving 0.1% in August. Chemical production fell 2.1% (+6.0% y/y) after a 0.1% uptick. Petroleum & coal product output weakened 2.4% (+11.8% y/y) after August's 0.3% increase. Food, beverage & tobacco output fell 0.6% (+1.0% y/y) after a 0.2% slip, but textile production strengthened 1.7% (2.7% y/y) in September after falling 1.7% in August. Apparel production rose 0.4% (10.3% y/y) after improving 0.6% in August.
Electric & gas utilities production declined 3.6% (+1.6% y/y) in September after August's 2.6% rise. Electric power output fell 3.9% (+2.7% y/y) while natural gas distribution declined 1.8% (-5.0% y/y). Mining output fell 2.3% (+6.9% y/y) after a 0.9% August decrease.
Capacity utilization fell to 75.2% in September from 76.2% in August. The latest level was the lowest since April of last year. A utilization rate of 76.4% had been expected. In manufacturing, utilization declined to 75.9% last month from 76.5% in August. It was the lowest level in three months.
Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.
Financial Stability and Coordination in Times of Crisis from Fed Governor Randal K. Quarles is available here.
Industrial Production (SA, % Change) | Sep | Aug | Jul | Sep Y/Y | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Total Output | -1.3 | -0.1 | 1.0 | 4.6 | -7.2 | -0.8 | 3.2 |
Manufacturing | -0.7 | -0.4 | 1.7 | 4.8 | -6.6 | -2.0 | 1.3 |
Durable Goods | -0.5 | -0.8 | 2.9 | 5.6 | -8.2 | -2.1 | 3.1 |
Motor Vehicles & Parts | -7.2 | -3.2 | 8.7 | -13.7 | -15.7 | -3.0 | 4.1 |
Selected High Tech | 0.6 | 0.0 | -0.4 | 10.7 | 7.1 | 3.9 | 9.0 |
Nondurable Goods | -1.0 | 0.1 | 0.5 | 4.6 | -4.4 | -1.8 | -0.3 |
Utilities | -3.6 | 2.6 | -3.1 | 1.6 | -3.4 | -0.8 | 4.9 |
Mining | -2.3 | -0.9 | 0.7 | 6.9 | -14.2 | 5.9 | 13.0 |
Capacity Utilization (%) | 75.2 | 76.2 | 76.3 | 72.1 | 71.6 | 77.4 | 79.2 |
Manufacturing | 75.9 | 76.5 | 76.8 | 72.4 | 71.2 | 75.8 | 77.7 |