Industrial production, manufacturing output decreased in July

by Talk Business & Politics staff ([email protected]) 251 views 

Industrial production fell 0.2% in July, according to the Federal Reserve. Manufacturing output declined by 0.4% in July and has decreased more than 1.5% since December 2018.

In July, mining output declined 1.8% as Hurricane Barry contributed to a decrease in oil extraction in the Gulf of Mexico. The index for utilities increased by 3.1%. Total industrial production rose 0.5% in July, from the same month in 2018, and it was 109.2% of its 2012 average. Capacity use for the industrial sector fell 0.3% in July to 77.5%, and this rate is 2.3 percentage points below its long-run (1972-2018) average.

The indexes for consumer goods and for defense and space equipment rose in July while other major market groups reported declines. The production of construction supplies decreased by 1%. Indexes for materials, business equipment and business supplies fell less than 0.5%. The weakness for materials led to cutbacks for all major components. Consumer goods rose as a result of an increase in consumer energy products and a small rise in automotive products.

The decline in manufacturing output can be attributed to decreases in durables, nondurables, and other manufacturing, which includes publishing and logging. Production fell in major durable goods categories, and the largest declines were in wood products, machinery and nonmetallic mineral products. The only notable increase was in aerospace and miscellaneous transportation equipment. Paper products had the only increase among nondurables. The indexes for textile and product mills, for printing and support and for plastics and rubber products all fell at least 1%.

Utilities output increased 3.1% in July after falling by a similar percentage in June. The index for mining rose 5.5% in July, from the same month in 2018.

Capacity use for manufacturing fell 0.4 percentage points to 75.4% — a rate that’s 2.9 percentage points lower than its long-run average. The operating rate for durable manufacturing declined 0.3 percentage points, and the rate for nondurable manufacturing fell 0.5 percentage points. The use rate for mining fell to 89.2% — a rate that’s about 2 percentage points above its long-run average. The rate for utilities rose 2.1 percentage points and was below its long-run average.