Industrial Production Doubles Expectations, Up 0.4 per cent In September

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UPDATE: Industrial production rose 0.4 per cent in September, beating expectations of a 0.2 per cent rise.Click here for updates >

However, last month’s number was revised down to -1.4 per cent from -1.2 per cent.

Below, the text from the release:

Market Groups

The production of consumer goods was unchanged in September after having fallen 1.5 per cent in August. For the third quarter as a whole, output moved down at an annual rate of 0.8 per cent, as a decline in durable goods more than offset an increase in nondurables. For September, the output of durable goods dropped 1.7 per cent. Among durable consumer goods categories, the production of automotive products fell 2.9 per cent, a second consecutive large decline. The indexes for home electronics and for miscellaneous goods posted smaller declines, and the index for appliances, furniture and carpeting moved up. The production of nondurables advanced 0.6 per cent, with increases in the output of both energy products and non-energy goods. The index for consumer energy products rose 0.8 per cent after having fallen 2.7 per cent in August; within the non-energy category, where production increased 0.5 per cent in September, there were gains in the indexes for foods and tobacco and for clothing, while the indexes for chemical products and for paper products declined.

The output of business equipment moved up 0.8 per cent in September and was nearly 11 per cent above its year-earlier level. In the third quarter, the production of business equipment advanced at an annual rate of 4.6 per cent, appreciably slower than its gain of 12.1 per cent in the second quarter. The production of transit equipment rose 1.7 per cent in September after having dropped 3.3 per cent in August; the gain in September was boosted by an increase in the production of civilian aircraft. The output of information processing equipment moved up 0.5 per cent, while the index for industrial and other equipment increased 0.4 per cent.

The output of defence and space equipment gained 1.7 per cent in September. For the third quarter, the index rose at an annual rate of 7.0 per cent, which more than reversed a decline of 5.7 per cent in the second quarter.

Among nonindustrial supplies, the output of construction supplies moved up 1.3 per cent in September, but it decreased at an annual rate of 3.5 per cent in the third quarter for its second consecutive quarterly decline. The production of business supplies rose 0.4 per cent in September after having fallen 1.3 per cent in August; the index moved down at an annual rate of 1.7 per cent in the third quarter.

The output of materials to be processed further in the industrial sector rose 0.4 per cent in September after having declined 1.6 per cent in August. The index for materials moved down at an annual rate of 0.9 per cent in the third quarter; decreases in durable materials and in energy materials more than offset an increase in nondurable materials. The output of durable materials edged down 0.1 per cent in September. Consumer parts fell noticeably for a second month; nevertheless, in September, the index stood 16.5 per cent above its year-earlier level. The output of equipment parts moved up 0.4 per cent in September after having declined 2 per cent or more in July and in August. In September, the production of nondurable materials advanced 0.6 per cent. The indexes for textiles and for chemicals increased, while the production of paper moved down. The output of energy materials rose 0.9 per cent following a large drop in August that was driven by decreases in oil and natural gas extraction related to Hurricane Isaac.

Industry Groups

Manufacturing output edged up 0.2 per cent in September; it fell 0.9 per cent in August. The index for manufacturing moved down at an annual rate of 0.9 per cent in the third quarter, its first quarterly decline since the second quarter of 2009. The factory operating rate was unchanged in September at 76.8 per cent, a rate 2.0 percentage points below its long-run average.

The production of durable goods edged up 0.1 per cent in September. Gains of 1 per cent or more were registered in the indexes for aerospace and miscellaneous transportation equipment and for electrical equipment, appliances, and components, but the output of motor vehicles and parts and of primary metals fell back. Capacity utilization for durable goods manufacturing was 76.8 per cent, a rate 0.3 percentage point below its long-run average. The production of durable goods declined for the third quarter as a whole at an annual rate of 1.0 per cent after having advanced solidly in the first half of the year. Among major durable goods categories, decreases in the third quarter were widespread.

The production of nondurables moved up 0.3 per cent in September. The index was unchanged in the third quarter and fell at an annual rate of 3.1 per cent in the second quarter. For September, decreases in the output of printing, of petroleum and coal products, and of plastics and rubber products were more than offset by increases in most of the other major categories. Capacity utilization for nondurable manufacturing was 78.1 per cent, a rate 2.8 percentage points below its long-run average.

Production in the non-NAICS manufacturing industries (logging and publishing) edged down 0.1 per cent in September. This index fell at an annual rate of 10.0 per cent in the third quarter after having registered a comparably sized decline in the second quarter.

In September, mining output increased 0.9 per cent after having fallen 1.6 per cent in August, when nearly all the oil and gas extraction capacity in the Gulf of Mexico was idled late in the month in anticipation of Hurricane Isaac. Capacity utilization for mining moved up 0.7 percentage point in September to 89.1 per cent, a rate 1.8 percentage points above its long-run average. The output of utilities advanced 1.5 per cent in September; it decreased 4.3 per cent in August. The operating rate for utilities rose 0.9 percentage point in September to 74.8 per cent, a rate 11.5 percentage points below its long-run average.

Capacity utilization rates in September for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.4 percentage point to 86.6 per cent, a rate 0.3 percentage point above its long-run average; at the primary and semifinished stages, utilization rose 0.3 percentage point to 75.6 per cent, a rate 5.5 percentage points below its long-run average; and at the finished stage, utilization moved up 0.1 percentage point to 77.5 per cent, a rate 0.3 percentage point higher 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 at the end of March 2013. The revised IP indexes will incorporate detailed data from the 2011 Annual Survey of Manufactures, conducted by the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2011 will also be incorporated. The update 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 2012 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. The 2013 release schedule is also available on the website.

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.

Here is the full release >

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ORIGINAL: Minutes away from U.S. industrial production numbers at 9:15 AM ET.

A survey of economists polled by Bloomberg revealed consensus expectations of a 0.2 per cent rise in September after industrial production unexpectedly fell 1.2 per cent the month before.

We will have the numbers LIVE at 9:15 AM ET. 

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