Global| Jan 17 2006Industrial Output Gain Led By High Tech
by:Tom Moeller
|in:Economy in Brief
Summary
Overall industrial output rose last month by 0.6% following an upwardly revised 0.8% increase during November. For the second month, the gain exceeded Consensus expectations which had been for a 0.5% rise. For all of 2005, output rose [...]
Overall industrial output rose last month by 0.6% following an upwardly revised 0.8% increase during November. For the second month, the gain exceeded Consensus expectations which had been for a 0.5% rise. For all of 2005, output rose 3.1%. The gain was down from a 4.1% increase during 2004 but the two years together were the strongest in five years.
Factory sector production increased a scant 0.2% (4.1% y/y) following an upwardly revised 0.5% November increase. Again, the annual increase for all of 2005 in factory production of 3.8% was down versus a 5.0% increase during 2004.
Output of business equipment again was notably strong. A 2.7% (26.1% y/y) increase in high tech output was led by another 1.1% (11.7% y/y) increase in computer output, a 3.5% (30.8% y/y) spike in semiconductors and a 1.8% (25.2% y/y) surge in output of communications gear.
Excluding the high tech sector, factory output was unchanged (2.4% y/y) following an upwardly revised 0.3% November increase. For all 2005, output less the high tech sector rose 2.6% after a 3.8% rise during 2004.
Motor vehicle & parts output fell for the third straight month. The 2.8% (-2.4% y/y) decline slowed the annual increase in output to 2.8%, the worst for motor vehicles since 2002. Output of appliances, furniture & carpeting also fell for the third month but the 0.4% (+2.2% y/y) decline masked a 0.9% (-1.8% y/y) increase in furniture output.
Total capacity utilization rose to 80.7%, the highest level since late 2001. Capacity grew 1.6% y/y and for the year the 1.3% gain was the strongest since 2002. Factory sector utilization remained unchanged at 79.6% in December though the annual average during 2005 of 78.8% was the highest since 2000.
Excluding the high tech sector, the factory utilization rate slipped slightly in December to 80.1%. The annual average of 79.3% about matched the previous high during 2000. Capacity less the high tech sector grew a paltry 0.1% in December, about the monthly rate of the last year. While improved versus declines during 2003 & 2004, the 0.5% increase for all of last year compared unfavorably to a 4.5% increase during 1998.
| Production & Capacity | Dec | Nov | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Industrial Production | 0.6% | 0.8% | 2.9% | 3.1% | 4.1% | 0.6% |
| Consumer Goods | 0.2% | -0.7% | 1.3% | 2.0% | 2.1% | 1.0% |
| Business Equipment | 0.5% | 1.3% | 10.2% | 9.0% | 9.3% | 0.0% |
| Capacity Utilization | 80.7% | 80.3% | 79.7% (12/05) | 80.0% | 78.6% | 75.7% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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