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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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Monday, October 19, 2015

September 2015 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) decreased 0.2% in September (-0.3% expected) after edging down 0.1% in August (originally -0.4%). Manufacturing output moved down 0.1% (but +1.6% YoY) for a second consecutive monthly decrease; the index for mining fell 2.0% (with oil and gas drilling down 4%, to its lowest level this century), while the index for utilities rose 1.3%. For 3Q as a whole, total IP rose at an annual rate of 1.8%, and manufacturing output increased 2.5%. A strong gain for motor vehicles and parts contributed substantially to the quarterly increases.
At 107.1% of its 2012 average, total industrial production in September was 0.4% above its year-earlier level. Wood Products output fell 2.0% (-2.0% YoY) while Paper decreased 0.5% (-2.5% YoY). 
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Capacity utilization (CU) for the industrial sector fell 0.3% in September to 77.5%, a rate that is 2.6 percentage points below its long-run (1972–2014) average. Wood Products CU tumbled 2.1% (-4.3% YoY) to 68.2%; Paper retreated by 0.5% (-1.9% YoY) to 81.5%. 
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Capacity at the all-industries and manufacturing levels moved higher -- All-industries: +0.1% (+1.6% YoY) to 138.1% of 2012 output; Manufacturing: +0.1% (+1.3% YoY) to 138.7%. Wood Products extended the upward trend that has been ongoing since November 2013 when increasing by 0.2% (+2.5% YoY) to 159.8%. Paper was unchanged (-0.6% 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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