December 2012 Industrial Production, Capacity Utilization and Capacity

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Industrial production increased 0.3 percent in December after having risen 1.0 percent in November when production rebounded in the industries that had been negatively affected by Hurricane Sandy in late October. For the fourth quarter as a whole, total industrial production moved up at an annual rate of 1.0 percent. Manufacturing output advanced 0.8 percent in December following a gain of 1.3 percent in November; production edged up at an annual rate of 0.2 percent in the fourth quarter. Manufacturing’s gains during November and December were the result of the Fed’s seasonal adjustments; output declined during both months on an unadjusted basis.

At 98.1 percent of its 2007 average, total industrial production in December was 2.2 percent above its year-earlier level. Industrial production of Wood Products decreased by 1.2 percent and Paper fell by 0.4 percent relative to November.

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Capacity utilization for total industry moved up 0.1 percentage point to 78.8 percent, a rate 1.5 percentage points below its long-run (1972--2011) average. Capacity utilization fell by 1.0 percent for Wood Products, but Paper decreased by only 0.2 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.