Industrial production was flat in June with increases in manufacturing and mining offsetting a decline in utilities, according to the Federal Reserve. In the second quarter, industrial production fell 1.2%, from the same period in 2018, and this was the second consecutive quarterly decrease.
In June, manufacturing output rose 0.4% as a nearly 3% rise in motor vehicles and parts led to an increase in factory production. Excluding motor vehicles and parts, manufacturing output rose 0.2%. The output of utilities declined 3.6% as mild temperatures led to decreased demand for air conditioning in June. The index for mining increased by 0.2%.
Total industrial production rose 1.3% in June, from the same month in 2018. Capacity use for the industrial sector declined 0.2 percentage points in June to 77.9%, a rate that is 1.9 percentage points lower than its long-run (1972-2018) average.
The drop in utilities contributed to small decreases for nondurable consumer goods, materials and business supplies through their energy components, but nearly all of the major non-energy market groups reported increases. Consumer durables increased the most, and declines for most of its categories were offset by a rise in automotive products.
Manufacturing output increased by 0.4% in June after rising 0.2% in May. Factory production declined 2.2% in the second quarter, from the same period in 2018, and this was similar to the pace in the first quarter. Indexes for durables and nondurables rose 0.4% and 0.5%, respectively, in June. The output for other manufacturers, including publishing and logging, fell 0.5%. With regard to durables, the 3% rise in the output of motor vehicles and parts was accompanied by an increase of about 1% in the indexes of nonmetallic mineral products and for computer and electronic products. With regard to nondurables, the index for petroleum and coal products rose 2.5%, and most other categories increased. The indexes declined for printing and support activities and for chemicals.
Electric utilities and natural gas utilities fell 3.9% and 2%, respectively, in June. Mining output increased by 0.2%, and a rise in oil and gas extraction was partially offset by declines in coal mining and in support activities for mining. Mining production rose 8.9% in the second quarter, from the same period in 2018, and was the 11th consecutive quarterly rise.
Capacity use for manufacturing increased 0.4 percentage points in June as durables and nondurables rose while other manufacturing, including publishing and logging, decreased. The overall manufacturing operating rate of 75.9% is 2.4 percentage points below its long-run average. The use rate for mining decreased to 91.5%, which is more than 4 percentage points higher than its long-run average. The operating rate for utilities fell 3 percentage points and was below its long-run average.