November 2021 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) rose 0.5% in November (+0.7% expected). The indexes for both manufacturing and mining increased 0.7%, while the index for utilities decreased 0.8%. At 102.3% of its 2017 average, total IP in November was 5.3% above its year-earlier level and at its highest reading since September 2019. 

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Industry Groups

In November, manufacturing output rose 0.7%, reaching its highest level since January 2019 (NAICS manufacturing: +0.7% MoM; +4.8% YoY). The indexes for durables, nondurables, and other manufacturing (logging and publishing) rose 0.8%, 0.5%, and 0.8%, respectively. Within durables, the largest increases were posted by motor vehicles and parts and by aerospace and miscellaneous transportation equipment (wood products: +0.7%). The only decrease was posted by machinery. Despite the increase for motor vehicles and parts in November, production for that industry was 5.4% below its year-earlier level. Within nondurables, textile and product mills, paper (+1.6%), and plastics and rubber products all recorded gains of more than 1%; the index for petroleum and coal products fell 1.2% after rising 3.8% in October.

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Capacity utilization (CU) for the industrial sector increased 0.3 percentage point (PP) to 76.8%; even so, it was 2.8PP below its long-run (1972–2020) average.

Manufacturing CU increased 0.5PP to 77.3% in November, its highest rate since December 2018 (NAICS manufacturing: +0.6%, to 77.5%; wood products: +0.7%; paper: +1.5%). The operating rate for mining rose 0.6PP to 77.7%, while the operating rate for utilities fell 0.8PP to 73.2%. The rates for all three groups remained below their long-run averages.

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Capacity at the all-industries level increased by 0.1% MoM (+0.4% YoY) to 133.1% of 2017 output. NAICS manufacturing edged up less than 0.1% (+0.3% YoY) to 130.6%. Wood products: 0.0% (+0.3% YoY) at 123.2%; paper: +0.1% (+0.8% YoY) to 113.9%.

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.