Manufacturing production falls 0.9% in January

by Talk Business & Politics staff (staff2@talkbusiness.net) 30 views 

Industrial production fell 0.6%, and manufacturing production declined 0.9% in January, from December, largely as a result of a decrease in motor vehicle assemblies, according to the Board of Governors of the Federal Reserve System. Excluding the manufacturing of motor vehicles and parts, factory output declined 0.2%.

Indexes for mining and utilities rose 0.1% and 0.4%, respectively. Total industrial production, at 109.4% of its 2012 average, rose 3.8% in January, from the same month in 2018. Capacity use for the industrial sector fell 0.6% in January to 78.2%, a rate that is 1.6 percentage points below its 1972 to 2018 average.

The large decline in the output of motor vehicles and parts contributed to decreases in consumer durable goods, transit equipment and durable materials. Consumer energy products and industrial and other equipment had gains of more than 0.5%, while information processing equipment, defense and space equipment and construction supplies had losses of nearly 0.5%.

While manufacturing output declined 0.9% in January, it rose 2.9% from the same month in 2018. Output of durable goods fell 1.7% because of the decrease in motor vehicles. The index for motor vehicles and parts declined 8.8% as vehicle assemblies fell from an annual rate of 12.3 million units in December, the highest monthly rate since June 2016, to 10.6 million units in January, the lowest monthly rate since May 2018. Other durable goods industries also reported declines. Only fabricated metal products and furniture had gains.

The output of nondurables was flat, with its components having mixed results. Petroleum and coal products output rose more than 1%, and apparel and leather production fell more than 1%. Publishing and logging rose 0.5%. Mining output rose 0.1% in January, and the mining index increased 15.3% from the same month in 2018. Utilities output increased 0.4% in January, with natural gas up 6% after falling 19% in December.

Capacity use for manufacturing fell 0.7 percentage points to 75.8% in January, about 2.5 percentage points less than average, spanning 1972 to 2018. The use rate for mining declined to 94.8% but was above the average of 87.1%. The operating rate for utilities rose to 75.4%, which is 10 percentage points less than average.

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