January 2014 Industrial Production, Capacity Utilization and Capacity

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Industrial production decreased 0.3 percent in January (as opposed to expectations of a 0.2 percent gain) after having risen 0.3 percent in December. In January, manufacturing output fell 0.8 percent, partly because of the severe weather that curtailed production in some regions of the country. Additionally, manufacturing production is now reported to have been lower in the fourth quarter; the index is now estimated to have advanced at an annual rate of 4.6 percent in the fourth quarter rather than 6.2 percent. The output of utilities rose 4.1 percent in January, as demand for heating was boosted by unseasonably cold temperatures. At 101.0 percent of its 2007 average, total industrial production in January was 2.9 percent above its level of a year earlier.

Wood Products output dropped by 2.6 percent while Paper receded by 0.2 percent.

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The capacity utilization rate for total industry decreased in January to 78.5 percent, a rate that is 1.6 percentage points below its long-run (1972-2013) average.

Wood Products capacity utilization fell back by 2.9 percent, and Paper by 0.1 percent.

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Capacity at the all-industries and manufacturing levels both moved higher by 0.2 in January. Wood Products capacity jumped by 0.4 percent while Paper contracted by 0.1 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.