November 2012 Industrial Production, Capacity Utilization and Capacity

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Industrial production increased 1.1 percent in November after having fallen 0.7 percent in October. The Federal Reserve attributed the gain in November to a recovery in production for industries that had been negatively affected by Hurricane Sandy, which hit the Northeast region in late October. In November, manufacturing output increased 1.1 percent after having decreased 1.0 percent in October; in addition to the storm-related rebound, a sizable rise in the production of motor vehicles and parts boosted factory output in November. Actually, however, it appears the reported rise in manufacturing industrial production is almost wholly attributable to seasonal adjustments; November’s not-seasonally adjusted estimate was 0.9 percent lower than in October and 2.0 percent below September’s peak. At 97.5 percent of its 2007 average, total industrial production in November was 2.5 percent above its year-earlier level. Industrial production of Wood Products increased by 3.4 percent and Paper rose by 0.2 percent.
 

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Capacity utilization for total industry increased 0.7 percentage point to 78.4 percent, a rate 1.9 percentage points below its long-run (1972--2011) average. Capacity utilization rose by 3.6 percent for Wood Products, but Paper increased by only 0.4 percent.

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Capacity at the all-industries and manufacturing levels crept higher (0.1 percent). By contrast, Wood Products and Paper both dropped by 0.2 percent.


The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.