August 2014 Industrial Production, Capacity Utilization and Capacity

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Industrial production edged down 0.1 percent in August, and the index for manufacturing output decreased 0.4 percent; the declines were the first for each since January. The gains in July for both indexes were revised down. The declines in total industrial production and in manufacturing output in August reflected a decrease of 7.6 percent in the production of motor vehicles and parts, which had jumped more than 9 percent in July. Excluding motor vehicles and parts, factory output rose 0.1 percent in both July and August. Meanwhile, the output of utilities rose 1.0 percent. At 104.1 percent of its 2007 average, total industrial production in August was 4.1 percent above its year-earlier level.

Wood Products and Paper output rose by 0.2 and 0.3 percent, respectively. 

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Capacity utilization for total industry decreased 0.3 percentage point in August to 78.8 percent, a rate 1.0 percentage point above its level of a year earlier and 1.3 percentage points below its long-run (1972-2013) average. Manufacturing capacity utilization declined by 0.6 percent; Wood Products fell by 0.3 percent, but Paper rose by 0.5 percent. 

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Capacity at the all-industries and manufacturing levels moved higher by, respectively, 0.3 and 0.2 percent. Wood Products extended its year-long trend when increasing by 0.4 percent. Paper, on the other hand, contracted by 0.2 percent to another new low.

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.