June 2015 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) increased 0.3% in June (+0.2% expected) but fell at an annualized rate of 1.4% during 2Q2015. In June, manufacturing output was unchanged: The output of motor vehicles and parts fell 3.7%, but production elsewhere in manufacturing rose 0.3%. The indexes for mining and utilities advanced 1.0% and 1.5%, respectively. At 105.7% of its 2007 average, total IP in June was 1.5% above its year-earlier level -- the weakest rate of growth since February 2010. Wood Products output fell by 1.7% (-1.0% YoY) but Paper rose 0.3% (+0.1% YoY). 

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Capacity utilization for the industrial sector increased 0.2% (-1.1% YoY) in June to 78.4%, a rate that is 1.7 percentage points below its long-run (1972–2014) average. Wood Products CU declined 2.0% (-5.5% YoY) to 67.2%; Paper rose by 0.4% (+2.3% YoY) to 84.4%. 

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Capacity at the all-industries and manufacturing levels moved higher -- all-industries: +0.1% (+2.6% YoY) to 134.8% of 2007 output; Manufacturing: +0.1% (+2.1% YoY) to 132.9%. Wood Products extended the upward trend that has been ongoing since July 2013 when increasing by 0.3% (+4.7% YoY) to 119.1%. Paper once again contracted by 0.1% (-2.1% YoY) to 98.3% -- 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.