Industrial, manufacturing production declined in September

Industrial production decreased by 0.4% in September, from August, according to the Federal Reserve. In the third quarter, industrial production increased by 1.2%, from the same period in 2018.

Manufacturing production fell 0.5% in September, and output was reduced as a result of the strike against General Motors. Excluding motor vehicles and parts, the overall index and the manufacturing index declined by 0.2%. Mining production declined by 1.3%, while utilities output increased 1.4%.

Total industrial production fell 0.1% in September, from the same month in 2018. Capacity use for the industrial sector declined 0.4 percentage points in September to 77.5%. The rate was 2.3 percentage points below its long-run (1972-2018) average.

The decline in motor vehicle output in September contributed to a decrease of nearly 2% for consumer durables and to declines of about 1% for transit equipment and for durable goods materials. The indexes for other market groups were unchanged, but consumer energy products, information processing equipment and defense and space equipment all rose more than 1%. Industrial and other equipment declined more than 1%.

Manufacturing output rose 1.1% in the third quarter, from the same period in 2018. The motor vehicle industry strike contributed to a decline of 0.7% for durables. The index for nondurables fell 0.2%, and the index for other manufacturing, including publishing and logging, rose 0.5%. Excluding the 4.2% decline for motor vehicles and parts, the output of durables fell 0.1% as primary metals, machinery, and electrical equipment, appliances and computers, all fell nearly 1% or more. Computer and electronic products, aerospace and miscellaneous transportation equipment and furniture and related products increased by nearly 1% or more. With regard to nondurable goods industries, apparel and leather rose 2.3%, while plastics and rubber products declined 1.2%.

The index for mining fell 4.4% in the third quarter, from the same period in 2018, and it was the first quarterly decrease in three years. Reductions in crude oil extraction and well drilling contributed to the decrease. The output of utilities rose 1.4% in September as a result of warm weather boosting demand for electricity.

Capacity use for the manufacturing sector fell 0.4 percentage points to 75.3% in September and is 3 percentage points below its long-run average. The operating rate for durables fell 0.7 percentage points, and the rate for nondurables declined 0.3 percentage points. The use rate for mining declined to 88.9% and was nearly 2 percentage points higher than its long-run average. The rate for utilities increased 0.9 percentage points but was below its long-run average.

TRADE SALES, MANUFACTURING SHIPMENTS
The combined value of distributive trade sales and manufacturers’ shipments rose 0.2% to $1.46 trillion in August, from July, according to the U.S. Census Bureau. The sales and shipments were adjusted for seasonal and trading-day differences but not for price changes. The sales and shipments increased by 1.1% from August 2018.

The Census Bureau released Wednesday (Oct. 16) statistics on manufacturing and trade inventories and sales for August.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were flat at $2.04 trillion in August, from July. The inventories rose 4.2% from August 2018.

The total business inventories and sales ratio based on seasonally adjusted data at the end of August was 1.4. The August 2018 ratio was 1.35.