U.S. Industrial Production Edges Higher in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Minimal increase follows declines in three of prior four months.
- Factory output recovers; utilities production falls sharply.
- Capacity utilization stays close to its three-year low.
Total industrial production improved 0.1% (-0.2% y/y) during February after falling 0.5% in January, revised from a 0.1% decline reported last month. A 0.3% December shortfall was revised from no change. The Action Economics Forecast Survey expected production to be stable m/m in February. Production has fallen 1.2% from its high in September 2022.
Manufacturing production rose 0.8% (-0.7% y/y) last month, following a 1.1% January decline and stability in December. Mining output rebounded 2.2% (1.4% y/y) after a 2.9% January drop. Utilities production plummeted 7.5% in February (+0.8% y/y) and reversed all of the prior month’s 7.4% gain.
In the manufacturing sector, production of durable goods rose 1.0% (0.5% y/y) in February after a 1.1% January decline. Motor vehicle & parts production strengthened 1.8% last month (3.5% y/y) while machinery output surged 1.7% (-5.1% y/y). Electrical equipment & appliance output gained 0.8% but was unchanged y/y. Primary metals production eased 0.2% (-1.3% y/y) and computer & electronic product production rose 0.7% (7.9% y/y). In the nondurable goods sector, factory output rose 0.7% last month (-1.3% y/y) after falling 1.1% in January. Chemical production strengthened 1.6% (-0.5% y/y) and printing production improved 1.5% (-3.3% y/y). Paper output rose 1.1% (-0.2% y/y) and textile output increased 0.8% (-4.7% y/y). Petroleum & coal product output declined 0.4% (+1.9% y/y) and apparel production eased 0.3% (-13.2% y/y), off for the fourth straight month.
The major market groups posted mixed results in February. Consumer goods output fell 1.4% (-1.5% y/y) as a 2.0% decline (-2.1% y/y) in nondurable goods production overshadowed a 0.9% increase (0.8% y/y) in durable goods output. Business equipment production rose 1.7% last month (-0.2% y/y) while construction supplies output rose 1.9% (-2.2% y/y). Materials output increased 0.5% (0.6% y/y) in February.
In special aggregates, output of selected high-tech industries rose 0.3% (18.6 y/y) following a 0.4% gain in January. Manufacturing output excluding selected high-tech production rose 0.9% (-1.1% y/y) after falling 1.1% in January. Manufacturing output excluding selected high-tech industries and motor vehicle production rose 0.8% (-1.4% y/y) in February after falling 0.9% in January.
Total capacity utilization was unchanged m/m at 78.3% in February, its lowest level since September 2021. A 78.5% utilization rate had been expected. Capacity utilization for manufacturing improved to 77.0% in February from 76.4% in January. The capacity utilization rate for mining surged to 93.8% from 91.7. The operating rate for utilities declined to 67.8% from 73.5% in January.
Industrial production and capacity data 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.
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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