U.S. Industrial, Manufacturing Output Rebound In April

Industrial production increased 0.7 percent in April after decreasing in the previous two months. Manufacturing output rose 0.3 percent after declining the same amount in March. The index for utilities jumped 5.8 percent in April, as the demand for electricity and natural gas returned to a more normal level after being suppressed by warmer-than-usual weather in March. Mining production fell 2.3 percent in April, and it has decreased more than 1 1/2 percent per month, on average, over the past eight months. At 104.1 percent of its 2012 average, total industrial production in April was 1.1 percent below its year-earlier level. Capacity utilization for the industrial sector increased 0.5 percentage point in April to 75.4 percent, a rate that is 4.6 percentage points below its long-run (1972–2015) average.

Market Groups

The indexes for all major market groups either increased or were unchanged in April. The rise in the output of utilities contributed significantly to gains in the indexes for consumer goods, business supplies, and materials through their energy components. Among consumer goods, the output of durables rose 1.3 percent, and the production of non-energy nondurables moved up 0.3 percent. The increase for non-energy nondurables reflected gains for foods and tobacco and for chemical products that were partly offset by decreases for clothing and paper. The production of business equipment advanced 0.8 percent, mostly because of a sizable increase for industrial and other equipment. The indexes for defense and space equipment, construction supplies, and non-energy business supplies were little changed. The output of non-energy materials moved up 0.1 percent as a result of an increase in its durable component; the production of nondurable materials edged down.

Industry Groups

Manufacturing output increased 0.3 percent in April. The production of durables rose 0.6 percent; the largest gains were recorded by machinery and by motor vehicles and parts, with increases of about 2 1/2 percent and 1 1/4 percent, respectively. Only a few durable goods industries posted declines, with the largest, about 1 1/4 percent, for primary metals. The output of nondurable manufacturing was unchanged in April, as gains in the indexes for food, beverage, and tobacco products and for plastics and rubber products offset declines for nearly all of the other industries. The output of other manufacturing (publishing and logging) declined 0.4 percent.

The drop of 2.3 percent for mining in April reflected substantial cutbacks in oil and natural gas extraction as well as reductions in coal mining and in oil and gas well drilling and servicing. The index for coal mining has fallen nearly 40 percent over the past 12 months. The increase of 5.8 percent in the output of utilities was its largest since February 2007, when it leapt 6.2 percent. In April, electric utilities and natural gas utilities expanded 5.4 percent and 9.3 percent, respectively.

Capacity utilization for manufacturing increased 0.2 percentage point in April to 75.3 percent, a rate that is 3.2 percentage points below its long-run average. The operating rate for durables increased 0.4 percentage point, while the rates for nondurables and other manufacturing (publishing and logging) edged down. The operating rate for mining dropped to 72.5 percent, the lowest rate over the history of this series, while capacity utilization for utilities jumped 4.2 percentage points to 78.6 percent.

 

Original article posted at IndDist.com.

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