August 2022 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) decreased 0.2% in August (+0.2% expected). Manufacturing output edged up 0.1% after increasing 0.6% in July. The index for mining was unchanged, and the index for utilities decreased 2.3%. At 104.5% of its 2017 average, total IP in August was 3.7% above its year-earlier level.

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Market Groups

The indexes for the major market groups were mixed in August. Modest losses were registered by consumer goods, construction supplies, and materials, while gains were posted by business equipment, defense and space equipment, and business supplies. The cutback for consumer goods was concentrated in consumer energy products, whereas the decline for materials was fairly widespread. The largest decrease among materials groups, 2.0%, was in consumer parts. Within business equipment, the largest increase came in information processing and related equipment.

Industry Groups

Manufacturing output moved up 0.1% in August and was 3.3% above its year-earlier level. The index for durable manufacturing was unchanged, the index for nondurable manufacturing rose 0.2%, and the index for other manufacturing (publishing and logging) edged down 0.1%.

Within durables, gains of at least 1.0% were recorded by machinery, by computer and electronic products, by aerospace and miscellaneous transportation equipment, and by miscellaneous manufacturing. Losses of more than 1% were registered by wood products (-1.7%), by motor vehicles and parts, and by furniture and related products. Within nondurables, increases for petroleum and coal products, paper (+0.9%), and chemicals offset decreases for most other industries.

Mining output was unchanged in August after posting five consecutive monthly gains. The decrease of 2.3% for utilities reflected a decline for electric utilities moderated by a small increase for natural gas utilities.

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Capacity utilization (CU) declined 0.2 percentage point (PP) in August to 80.0%, a rate that is 0.4PP above its long-run (1972–2021) average.

Manufacturing CU was unchanged in August at 79.6%, a rate that is 1.4PP above its long-run average (wood products: -1.8%; paper: +0.9%). The operating rate for mining fell 0.3PP to 88.1%, while the operating rate for utilities fell 1.9PP to 72.8%. Capacity utilization for mining was nearly 2PP above its long-run average, but the rate for utilities remained substantially below its long-run average.

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Capacity at the all-industries level increased by 0.1% MoM (+1.4% YoY) to 130.7% of 2017 output. Manufacturing edged up by 0.1% (+1.0% YoY) to 129.0%. Wood products: 0.0% (+1.3% YoY) at 126.3%; paper: -0.1% (-0.3% YoY) to 110.1%.

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.