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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Tuesday, September 15, 2015

August 2015 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) decreased 0.4% in August (-0.2% expected) after increasing 0.9% (originally +0.6%) in July. Upward revisions to mining and utilities were largely responsible for July’s higher estimate; the revision resulted in total IP dropping in August by the greatest amount since August 2012. Manufacturing output fell 0.5% in August primarily because of a large drop in motor vehicles and parts (by the most since January 2009, and to a four-year low) that reversed a substantial portion of the jump in manufacturing during July; production elsewhere in manufacturing was unchanged. The index for mining fell 0.6% in August, while the index for utilities rose 0.6%.
At 107.1% of its 2012 average, total IP in August was 0.9% above its year-earlier level. Wood Products output fell by 0.1% (-1.7% YoY) while Paper rose 0.1% (-1.4% YoY).  
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Capacity utilization (CU) for the industrial sector fell 0.5% in August to 77.6% (-0.7% YoY), a rate that is 2.5 percentage points below its long-run (1972–2014) average. Wood Products CU decreased by 0.3% (-4.0% YoY) to 69.2%; Paper edged up by 0.1% (-0.7% YoY) to 82.2%. 
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Capacity at the all-industries and manufacturing levels moved higher -- All-industries: +0.1% (+1.6% YoY) to 138.0% of 2012 output; Manufacturing: +0.1% (+1.2% YoY) to 138.6%. Wood Products extended the upward trend that has been ongoing since November 2013 when increasing by 0.2% (+2.5% YoY) to 159.5%. Paper was unchanged (-0.7% YoY) at 116.9%.
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.

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