Industrial, manufacturing output declined in January

Industrial production fell 0.3% in January as unseasonably warm weather led to declines in the output of utilities and as a manufacturer decreased production of civilian aircraft, according to the Federal Reserve. The index for manufacturing fell 0.1% in January.

Excluding the production of aircraft and parts, factory output rose 0.3%. The mining index increased by 1.2%. Total industrial production fell 0.8% in January, from the same month in 2019. The production is at 109.2% of its 2012 average. Capacity use for the industrial sector fell 0.3 percentage points in January to 76.8%, a rate that is 3 percentage points below its long-run (1972-2019) average.

The major market groups reported mixed results in January, according to the Federal Reserve. The output of business equipment fell 2.6% as a result of the decline in aircraft production. The decrease in the utilities index led to decreases in consumer energy products and energy materials. The index for consumer durables increased and was supported by a 2.8% rise in the output of automotive products.

Manufacturing output in January was 0.8% below its level in the same month in 2019. The production of durable goods fell 0.5% in January as declines in aerospace and miscellaneous transportation equipment and for machinery were partially offset by a rise in motor vehicles and parts. The output of nondurable manufacturing increased by 0.3%, and nearly all of its component categories noted increases. The indexes for petroleum and coal production and for plastics and rubber products increased by more than 1%. The only index that decreased more than 1% was the index for apparel and leather.

Mining output in January was 3.1% higher than its level in the same month in 2019. The output for utilities declined 4% in January, with electric and natural gas utilities falling 3.2% and 7.7%, respectively. The use rate for manufacturing fell 0.1 percentage points in January to 75.1%, and this was 3.1 percentage points below its long-run average. The use rate for mining increased to 90.7% and was above its long-run average of 87.2%. The operating rate for utilities decreased to 70.6% and was about 15 percentage points below its long-run average.

DECEMBER DATA
The combined value of distributive trade sales and manufacturers’ shipments, adjusted for seasonal and trading-day differences but not for price changes, decreased 0.1% to $1.46 trillion in December, from November, according to the U.S. Census Bureau. The value increased by 1.7% from December 2018.

The Census Bureau recently announced manufacturing and trade statistics for December.

Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, increased 0.1% to $2.04 trillion in December, from November. The inventories increased by 2.2% from December 2018.

The total business inventories/sales ratio based on seasonally adjusted data at the end of December was 1.40. The December 2018 ratio was 1.39.