Industrial, manufacturing production increased in August

Industrial production rose 0.6% in August after falling 0.1% in July, according to the Federal Reserve.

The Federal Reserve released Tuesday (Sept. 17) industrial production and capacity use statistics for August.

Manufacturing production rose 0.5% after falling in July. Factory output increased 0.2% per month over the past four months after falling 0.5% in the first four months of the year. In August, the indexes for utilities and mining rose 0.6% and 1.4%, respectively. Total industrial production increased 0.4% in August, from the same month in 2018. Capacity use for the industrial sector increased 0.4 percentage points to 77.9% in August, and this rate is 1.9 percentage points below its long-run (1972-2018) average.

All major market groups reported increases in August. The index for consumer goods increased by 0.2% as a rise in nondurables was partially offset by a decrease in durables. The indexes for business equipment, defense and space equipment, construction supplies, business supplies and materials all rose at rates between 0.5% and 1%. Materials rose 0.9% as a result of increases in nondurables, durables and energy materials.

Manufacturing output increased 0.5% in August as the indexes for durables and nondurables rose, and the index for other manufacturing, including publishing and logging, declined. Production increased in most major categories in durable manufacturing. The largest increase was in machinery, primary metals and nonmetallic mineral products. The only significant decline was motor vehicles and parts. Nondurables rose 0.5% and was reflected in the strength in plastics and rubber products and in chemicals. Other major nondurable goods industries had declines or very small increases.

Mining output rose 1.4% in August after falling by a similar amount in July. Output in July was suppressed by a cutback in oil extraction in the Gulf of Mexico as a result of Hurricane Barry. Utilities output increased 0.6% with increases in electric and natural gas utilities.

Capacity use for manufacturing rose 0.3 percentage points to 75.7% in August, and the rate is 2.6 percentage points below the long-run average. Operating rates for durable and nondurable manufacturing increased by 0.3 percentage points. The use rate for mining increased to 90.5%, and this is slightly lower than the average in the three months before Hurricane Barry but 3.4 percentage points higher than the long-run average. The rate for utilities rose 0.3 percentage points was well below its long-run average.

JULY REPORT
The combined value of distributive trade sales and manufacturers’ shipments rose 0.3% to $1.47 trillion in July, from June, according to the U.S. Census Bureau. The combined value increased by 1.3% from July 2018.

The Census Bureau recently released manufacturing and trade statistics for July.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, rose 0.4% to $2.04 trillion in July, from June. The inventories increased by 4.8% from July 2018.

The total business inventories/sales ratio based on seasonally adjusted data was 1.4 in July. The July 2018 ratio was 1.35.