December U.S. industrial production data are out.
Industrial output rose 0.3% in December, right in line with consensus estimates. November’s advance was revised down to 1.0% from 1.1%.
Capacity utilization rose to 79.2% from November’s upward-revised 79.1% reading, above consensus estimates.
Manufacturing production growth slowed to 0.4% in December from 0.6% in November, but economists predicted a slightly larger slowdown to a 0.3% growth rate.
Below is a summary of the data from the release.
The production of consumer goods increased 1.5 per cent in November and stood 2.7 per cent above its level of a year earlier. The output of durable consumer goods rose 2.2 per cent, and all of its major components registered gains of 1.0 per cent or more. The largest increases were in the production of automotive products, which rose 3.3 per cent, and in the production of home electronics, which moved up 2.6 per cent. The production of consumer nondurables rose 1.3 per cent. The rise was supported by strong gains in chemical products and especially in consumer energy products. After three consecutive months of gains, the output of business equipment fell 0.5 per cent in November. The indexes for information processing equipment and for industrial and other equipment declined 1.8 per cent and 0.6 per cent, respectively, while the production of transit equipment increased 1.0 per cent. Despite its decrease in November, the index for business equipment was 2.2 per cent above its year-earlier level.
The output of defence and space equipment declined 0.8 per cent in November following three months of gains. The index for November was 1.4 per cent above its year-earlier level.
Among nonindustrial supplies, construction supplies moved up 0.6 per cent in November to record its sixth consecutive monthly increase; the index was 4.9 per cent above its level of a year earlier. The output of business supplies advanced 1.0 per cent in November, its fifth consecutive increase, and has gained 3.1 per cent during the past 12 months.
In November, the production of materials to be processed further in the industrial sector rose 1.4 per cent. The rise reflected improvements in each of the major components of the index, with an advance of 2.7 per cent for energy materials, a gain of 0.9 per cent for durable materials, and an increase of 0.2 per cent for nondurable materials. Among durable materials, all major components registered gains. Among nondurable materials, the indexes for textile materials and chemical materials increased 2.4 per cent and 0.4 per cent, respectively, while paper production decreased 0.5 per cent.
Manufacturing output rose 0.6 per cent in November to a level that was 2.9 per cent above a year earlier but 3.6 per cent below its pre-recession peak; gains were widespread across industries. The factory operating rate rose 0.4 percentage point to 76.8 per cent, a rate 1.9 percentage points below its long-run average.
The production of durable goods advanced 0.8 per cent in November. The output of motor vehicles and parts increased 3.4 per cent, and gains of nearly 1.0 per cent or more were recorded for wood products; non-metallic mineral products; fabricated metal products; electrical equipment, appliances, and components; furniture and related products; and miscellaneous manufacturing. Decreases were registered by the indexes for primary metals, for machinery, for computers and electronic products, and for aerospace and miscellaneous transportation equipment; each declined 0.2 per cent. The utilization rate for durable manufacturers rose 0.4 percentage point to 77.3 per cent and was above its long-run average of 77.0 per cent for the first time since April 2008.
The output of nondurables rose 0.5 per cent in November for its largest increase since December 2012. The index for textile and product mills rose 1.7 per cent, while the indexes for petroleum and coal products and for chemicals both advanced 0.9 per cent. Small gains were recorded by paper and by plastics and rubber products, while small losses were registered by apparel and leather and by printing and support. The operating rate for nondurables rose 0.4 percentage point to 77.6 per cent, a rate 3.1 percentage points below its long-run average.
Following a 0.7 per cent decline in October, the production of non-NAICS manufacturing industries (publishing and logging) moved up 0.6 per cent in November; over the past 12 months, output for this group of industries has decreased 1.5 per cent.
Mining output advanced 1.7 per cent in November after having declined 1.5 per cent in October; temporary shutdowns of oil and gas rigs in the Gulf of Mexico in anticipation of Tropical Storm Karen contributed to the October decrease. Capacity utilization at mines increased 1.1 percentage points to 89.7 per cent in November and has been at or above its long-run average of 87.3 per cent since October 2011. The output of utilities rose 3.9 per cent in November, and similarly sized gains were posted for both the electric and the natural gas categories. The capacity utilization rate for utilities rose 3.0 percentage points to 81.0 per cent.
Capacity utilization rates in November for industries grouped by stage of process were as follows: At the crude stage, utilization increased 1.1 percentage points to 88.3 per cent, a rate 2.0 percentage points above its long-run average; at the primary and semifinished stages, utilization rose 1.2 percentage points to 77.9 per cent, a rate 3.1 percentage points below its long-run average; and at the finished stage, utilization edged up 0.1 percentage point to 75.9 per cent, a rate 1.2 percentage points lower than its long-run average.
Revision of Industrial Production and Capacity Utilization
The Federal Reserve Board plans to issue its annual revision to the index of industrial production (IP) and the related measures of capacity utilization in late March 2014. New annual benchmark data for 2012 for manufacturing will not be available in time for this revision, however, the revised IP indexes will incorporate other annual data, including information from the U.S. Geological Survey on the mining of metallic and nonmetallic minerals (except fuels). The weights for market splits of the indexes will be updated with information from the 2007 benchmark input-output accounts from the Bureau of Economic Analysis. The updated IP indexes will include revisions to the monthly indicator (either product data or input data) and to seasonal factors for each industry. In addition, the estimation methods for some series may be changed. Any modifications to the methods for estimating the output of an industry will affect the index from 1972 to the present.
Capacity and capacity utilization will be revised to incorporate data through the fourth quarter of 2013 from the Census Bureau’s Quarterly Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the U.S. Department of Energy, and other organisations.
Once the revision is published, it will be available on the Board’s website at www.federalreserve.gov/releases/G17.
Note. The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS.
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