November 2023 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) increased 0.2% in November (+0.3% expected), and manufacturing output rose 0.3%. The increase in manufacturing output was more than accounted for by a 7.1% bounceback in motor vehicles and parts production following the resolution of strikes at several major automakers. The index for manufacturing excluding motor vehicles and parts decreased 0.2%. The output of utilities moved down 0.4%, and the output of mines moved up 0.3%. Total industrial production in November was 0.4% below its year-earlier level. 

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Market Groups

The output of major market groups was mixed in November, with the rebound in motor vehicles contributing to most areas of strength. A 7.5% increase in the index for automotive products contributed to a gain of 3.5% in consumer durables, while the production of consumer nondurable goods decreased 0.8%. The output of business equipment moved up 0.9% primarily because of an increase in the index for transit equipment. Defense and space equipment registered a gain of 1.2%. The indexes for construction supplies and for business supplies were unchanged relative to October. An increase of 0.3% in materials output was buoyed by a large increase in the index for consumer parts (2.7%) as motor vehicle parts production also rebounded in November.

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Industry Groups

Within durable manufacturing, the output of motor vehicles and parts rebounded 7.1% after a strike-induced drop of 9.9% in October. Elsewhere in durable manufacturing, increases of around 1.0% were seen in the indexes for computer and electronic products as well as for aerospace and miscellaneous transportation equipment. Decreases of around 1.0% occurred in the indexes for wood products and for miscellaneous. Within nondurable manufacturing, the only increase was seen in the index for printing and support (0.2%). The remaining categories receded (e.g., paper: -1.1%), with the largest declines observed in the indexes for textile and product mills (1.9%) and for apparel and leather (3.4%).

Mining output moved up 0.3% in November and was 2.3% above its year-earlier level. The index for utilities stepped down 0.4% in November and was 1.0% below its year-earlier level.

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Capacity utilization (CU) moved up 0.1 percentage point (PP) to 78.8% in November, a rate that is 0.9PP below its long-run (1972–2022) average.

Manufacturing CU edged up 0.2PP to 77.2% in November, a rate that is 1.0PP below its long-run (1972–2022) average; wood products: -1.1%; paper: -1.0%. The operating rate for mining rose 0.3PP to 93.7%, a rate that is 7.3PP above its long-run average. The operating rate for utilities moved down 0.5PP to 70.8%, well below its long-run average.

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Capacity at the all-industries level increased by 0.1% MoM (+1.5% YoY) to 130.3% of 2017 output. Manufacturing also edged up by 0.1% (+1.4% YoY) to 129.2%. Wood products: less than +0.1% (+0.5% YoY) at 120.1%; paper products: -0.1% (-1.1% YoY) to 105.4%.

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.