Industrial production and manufacturing production decreased by 0.8% and 0.6%, respectively, in October, from September, according to the Federal Reserve. Much of the decline can be attributed to the 7.1% decrease in output of motor vehicles and parts as a result of a strike at General Motors.
Declines for total industrial production, manufacturing and motor vehicles and parts reached the highest level since May 2018, April 2019 and January 2019, respectively. Excluding motor vehicles and parts, the index for total industrial production fell 0.5%, and the index for manufacturing declined by 0.1%. Mining production decreased by 0.7%, and utilities output declined 2.6%.
Total industrial production fell 1.1% in October, from the same month in 2018. Capacity use for the industrial sector fell 0.8 percentage points to 76.7% in October, and the rate is 3.1 percentage points below its long-run (1972-2018) average.
The decline in motor vehicle output led to decreases of 4.1% in consumer durables, 2.7% in transit equipment and 1.1% in durable goods materials. The decrease in the index for utilities contributed to declines of 1% or more for consumer energy products and for energy materials. Most other major market groups had declines of between 0.5% and 1%. The only increases among the market groups were for non-energy nondurable consumer goods and for industrial and other equipment.
Manufacturing output fell 1.5% in October, from the same month in 2018. The strike in the motor vehicle industry contributed to a 1.2% decline in durables. Excluding motor vehicles and parts, the output of durables fell 0.2%. The indexes for electrical equipment, appliances and components and for miscellaneous manufacturing decreased more than 1%, while wood products rose 0.7%. The production of nondurables was flat, with increases in the indexes for food, beverage and tobacco products and for printing and support. The increases were offset by declines in other indexes. The output of other manufacturing (publishing and logging) fell 1%.
The index for mining rose 2.7% in October, from the same month in 2018. A decrease in the output of electricity more than offset a rise in the index for natural gas utilities.
Capacity use for manufacturing declined 0.5 percentage points in October to 74.7%, a rate that is 3.6 percentage points below its long-run average. The operating rate for durables fell 1 percentage point, and the rate for nondurables decreased by 0.1 percentage points. The use rate for mining fell to 88.8% and was 1.7 percentage points higher than its long-run average. The rate for utilities declined 2.1 percentage points and was below its long-run average.
DECLINE IN VALUE
The combined value of distributive trade sales and manufacturers’ shipments, adjusted for seasonal and trading day differences but not for price changes, fell 0.2% to $1.46 trillion in September, from August, according to the U.S. Census Bureau. The value was up 0.5% in September, from the same month in 2018.
Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were flat at $2.04 trillion in September, from August. The inventories rose 3.7% in September, from the same month in 2018.
The total business inventories/sales ratio based on seasonally adjusted data at the end of September was 1.40, up from 1.36 in the same month in 2018.