U.S. INDUSTRIAL PRODUCTION DOWN 0.8%

U.S. FRB - November 15, 2019 - Industrial Production and Capacity Utilization - G.17

Industrial production fell 0.8 percent in October after declining 0.3 percent in September. Manufacturing production decreased 0.6 percent in October. Much of this decline was due to a drop of 7.1 percent in the output of motor vehicles and parts that resulted from a strike at a major manufacturer of motor vehicles. The decreases for total industrial production, manufacturing, and motor vehicles and parts were their largest since May 2018, April 2019, and January 2019, respectively.

Excluding motor vehicles and parts, the index for total industrial production moved down 0.5 percent, and the index for manufacturing edged down 0.1 percent. Mining production decreased 0.7 percent, while utilities output fell 2.6 percent.

At 108.7 percent of its 2012 average, total industrial production was 1.1 percent lower in October than it was a year earlier. Capacity utilization for the industrial sector decreased 0.8 percentage point in October to 76.7 percent, a rate that is 3.1 percentage points below its long-run (1972–2018) average.

Market Groups

In October, the fall in motor vehicle output contributed to decreases of 4.1 percent in consumer durables, 2.7 percent in transit equipment, and 1.1 percent in durable goods materials. The step-down in the index for utilities contributed to decreases of 1 percent or more for consumer energy products and for energy materials, while most other major market groups recorded declines of between 1/2 percent and 1 percent. The only increases among the market groups were for non-energy nondurable consumer goods and for industrial and other equipment.

Industry Groups

Manufacturing output fell 0.6 percent in October to a level 1.5 percent lower than its year-earlier reading. In October, the strike in the motor vehicle industry contributed to a drop of 1.2 percent for durables. Excluding motor vehicles and parts, the output of durables moved down 0.2 percent. The indexes for electrical equipment, appliances, and components and for miscellaneous manufacturing each moved down more than 1 percent; wood products recorded the largest gain, with an increase of 0.7 percent. The production of nondurables was unchanged, as increases in the indexes for food, beverage, and tobacco products and for printing and support were offset by declines in other indexes. The output of other manufacturing (publishing and logging) fell 1.0 percent.

Mining output moved down 0.7 percent in October following a similarly sized decline in September, but the index for mining was still 2.7 percent higher than its year-earlier level. The output of utilities fell 2.6 percent in October; a decrease in the output of electricity more than offset an increase in the index for natural gas utilities.

Capacity utilization for manufacturing decreased 0.5 percentage point in October to 74.7 percent, a rate that is 3.6 percentage points below its long-run average. The operating rate for durables dropped 1.0 percentage point, while the rate for nondurables edged down 0.1 percentage point. The utilization rate for mining fell to 88.8 percent yet was still 1.7 percentage points higher than its long-run average. The rate for utilities declined 2.1 percentage points and remained well below its long-run average.

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