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.