March 2024 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) rose 0.4% in March (+0.4% expected) but declined at an annual rate of 1.8% in the first quarter. Manufacturing output increased 0.5% in March, boosted in part by a gain of 3.1% in motor vehicles and parts; factory output excluding motor vehicles and parts moved up 0.3%. The index for mining fell 1.4%, and the index for utilities gained 2%. At 102.7% of its 2017 average, total industrial production in March was unchanged compared with its year-earlier level. 

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Market Groups

Most major market groups recorded growth in March. The production of consumer durables gained 1.9%, bolstered by a 3.2% increase in the output of automotive products. Elsewhere, there were significant gains in the indexes of nondurable consumer goods (1.0%), defense and space equipment (0.9%), and business supplies (0.8%). In contrast, the production of energy materials decreased 0.3%, and the index for construction supplies declined 1.0%.

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Industry Groups

Industry groups within durable manufacturing posted mixed results in March. Significant gains were recorded in motor vehicles and parts (3.1%), aerospace and miscellaneous transportation equipment (1.2%), and wood products (+0.7%). In contrast, the indexes for nonmetallic mineral products, for furniture, and for primary metals fell 1.8%, 1.0%, and 0.7%, respectively. Within nondurables, gains in the output of petroleum and coal products (4.8%) and chemicals (0.7%) were partially offset by a decline of 0.5% in the output of food, beverage, and tobacco products (paper: +0.6%).

Mining output decreased 1.4% in March and fell at an annual rate of 12.3% in the first quarter. Declines in the output of oil and gas extraction, mining (except oil and gas), and support services for mining all contributed to the first quarter drop in mining output. In March, the output of utilities increased 2%, as both electric and natural gas utilities moved up.

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Capacity utilization (CU) moved up to 78.4% in March, a rate that is 1.2 percentage points (PP) below its long-run (1972–2023) average.

Manufacturing CU moved up 0.3PP in March to 77.4%, a rate that is 0.8PP below its long-run average (wood products: +0.6%; paper: +0.7%). The operating rate for mining fell 1.3PP to 91.0%, while the operating rate for utilities increased 1.2PP to 69.1%. The rate for mining was 4.5PP above its long-run average, while the rate for utilities remained substantially below its long-run average.

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Capacity at the all-industries level edged up by 0.1% MoM (+1.4% YoY) to 130.9% of 2017 output. Manufacturing also increased by 0.1% (+1.5% YoY) to 129.9%. Wood products: +0.1% (+0.4% YoY) to 120.4%; paper products: unchanged (-1.0% YoY) at 105.3%.

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.

February 2024 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) edged up 0.1% in February (0.0% expected) after declining 0.5% in January (originally -0.1%). In February, the output of manufacturing rose 0.8% and the index for mining climbed 2.2%. Both gains partly reflected recoveries from weather-related declines in January; also, January’s data was revised from -0.5% MoM to -1.1%. The index for utilities fell 7.5% in February because of warmer-than-typical temperatures. At 102.3% of its 2017 average, total IP in February was 0.2% below its year-earlier level. 

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Market Groups

The output of most major market groups moved up in February. An exception is the index for consumer goods, which declined 1.4%, driven almost entirely by a utilities-related decrease of 8.6% in the index for consumer energy. Elsewhere in consumer goods, the indexes for non-energy nondurables and durables rose 0.6 and 0.9%, respectively. Similarly, within materials, all market groups posted gains except energy materials, the output of which fell 0.2%. All other market groups also recorded increases, led by construction supplies and business equipment, the output of which increased 1.9 and 1.7%, respectively.

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Industry Groups

Manufacturing output stepped up 0.8% in February after declining 1.1% in January. In February, durable manufacturing posted a gain of 1%, and the index for nondurable output increased 0.7%. The output of other manufacturing (publishing and logging) inched down 0.1%. Among durables, notable increases were recorded in wood products (2.4%), miscellaneous manufacturing (2.3%), and motor vehicles and parts (1.8%). Nondurables also experienced widespread growth, with the largest increases in the output of chemicals (1.6%), printing and support (1.5%), and paper (1.1%).

Mining output climbed 2.2% in February after falling 2.9% in January. The output of utilities, however, dropped 7.5% in February as the indexes for electric and natural gas utilities decreased 6.5 and 13%, respectively.

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Capacity utilization (CU) for the industrial sector remained at 78.3% in February, a rate that is 1.3 percentage points (PP) below its long-run (1972–2023) average.

Manufacturing CU increased 0.6PP to 77% in February, a rate that is 1.2PP below its long-run average (wood products: +2.3%; paper: +1.1%). The operating rate for mining moved up 2.1PP to 93.8%, a rate that is 7.3PP above its long-run average. The operating rate for utilities slid 5.7PP to 67.8%, well below its long-run average of 84.4%.

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Capacity at the all-industries level edged up by 0.1% MoM (+1.4% YoY) to 130.8% of 2017 output. Manufacturing also increased by 0.1% (+1.5% YoY) to 129.8%. Wood products: +0.1% (+0.4% YoY) to 120.3%; paper products: unchanged (-1.0% YoY) at 105.3%.

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.

January 2024 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) edged down 0.1% in January (+0.2% expected) after recording no change in December. In January, manufacturing output declined 0.5% and mining output fell 2.3%; winter weather contributed to the declines in both sectors. The index for utilities jumped 6.0%, as demand for heating surged following a move from unusually mild temperatures in December to unusually cold temperatures in January. At 102.6% of its 2017 average, total IP in January was identical to its year-earlier level. 

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Market Groups

The major market groups posted mixed results in January. The index for consumer goods rose 0.6% with modest gains in its durable and nondurable components. The indexes for business equipment, construction supplies, and business supplies all declined less than 1%; the index for construction supplies was 4.1% below its year-earlier level. Meanwhile, the output of defense and space equipment continued to post solid growth in January and was over 13% above its year-earlier level. Materials output decreased 0.4% in January, as the non-energy component decreased 0.7%, while the energy component edged up 0.1%.

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Industry Groups

Manufacturing output fell 0.5% in January; the index for durable manufacturing edged up 0.1%, while the index for nondurable manufacturing fell 1.1%. The index for other manufacturing (publishing and logging) moved down 0.2%. Among durables, the largest gains were recorded in electrical equipment, appliances, and components as well as in aerospace and miscellaneous transportation equipment. Computer and electronic products also moved up in January, in part based on the continued strength in semiconductor production. Nonmetallic mineral products and primary metals recorded declines of around 1%; wood products: -0.7%. Declines were widespread among nondurables, with notable weather-related decreases in the indexes of petroleum and coal products, chemicals, and plastics and rubber products; paper: -1.9%.

In January, mining output fell 2.3% amid a weather-related pullback in oil and gas extraction and a drop in coal production. The output of utilities jumped 6.0% as electric and natural gas utilities output increased 4.7 and 13.9%, respectively.

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Capacity utilization (CU) for the industrial sector moved down 0.2 percentage point (PP) in January to 78.5%, a rate that is 1.1PP below its long-run (1972–2023) average.

Manufacturing CU decreased to 76.6% in January, a rate that is 1.6PP below its long-run average (wood products: -0.8%; paper: -1.9%). The operating rate for mining decreased 2.3PP to 92.2%, a rate that is 5.7PP above its long-run average. The operating rate for utilities moved up 4.0PP to 74.2%, well below its long-run average of 84.4%.

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Capacity at the all-industries level edged up by 0.1% MoM (+1.4% YoY) to 130.6% of 2017 output. Manufacturing also increased by 0.2% (+1.5% YoY) to 129.6%. Wood products: +0.1% (+0.4% YoY) at 120.2%; paper products: unchanged (-1.0% YoY) at 105.3%.

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.

December 2023 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) moved up 0.1% in December (-0.1% expected) and declined 3.1% at an annual rate in the fourth quarter. Manufacturing output edged up 0.1% in December after increasing 0.2% in November. The index for utilities declined 1.0% in December, while the index for mining rose 0.9%. At 102.5% of its 2017 average, total industrial production in December was 1% above its year-earlier level. 

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Market Groups

The major market groups posted mixed results in December. The production of consumer goods moved up 0.2%, largely from gains in durable consumer goods; the production of nondurable consumer goods was flat. The indexes of business equipment, construction supplies, and business supplies all registered slight declines in December. The output of defense and space equipment rose 0.5% in December and recorded a gain of 9.1% at an annual rate for the fourth quarter. Materials output edged up in December, as a slight decline in its non-energy component was more than offset by a gain of 0.5% in its energy component.

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Industry Groups

Manufacturing output ticked up 0.1% in December but declined 2.2% (annual rate) in the fourth quarter. Excluding motor vehicles and parts, factory output declined 0.1% in December and 0.3% (annual rate) in the fourth quarter. In December, the index for durable manufacturing fell 0.4%, while the index for nondurable manufacturing rose 0.6%. The index for other manufacturing (publishing and logging) declined 1.1%. Within durables, declines of more than 1% were recorded by wood products (-1.9%), by fabricated metal products, by machinery, and by electrical equipment, appliances, and components. Motor vehicles and parts as well as furniture and related products posted gains of more than 1%. Within nondurables, most industries registered gains with the exception of paper (-1.3%) and of printing and support.

In December, mining output increased 0.9%, and the output of utilities decreased 1.0%. For the fourth quarter, the output of mines fell 3.4% (annual rate) after increasing in the previous two quarters. The index for utilities dropped 8.2% (annual rate) in the fourth quarter after jumping over 15% in the previous quarter.

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Capacity utilization (CU) was unchanged in December at 78.6%, a rate that is 1.1 percentage points (PP) below its long-run (1972–2022) average.

Manufacturing CU remained unchanged at 77.1%, a rate that is 1.1PP below its long-run average (wood products: -1.9%; paper: -1.2%). The operating rate for mining moved up 0.9PP to 93.8%, a rate that is 7.4PP above its long-run average. The operating rate for utilities moved down 0.9PP to 70.0%, well below its long-run average.

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Capacity at the all-industries level increased by 0.1% MoM (+1.4% YoY) to 130.4% of 2017 output. Manufacturing also edged up by 0.1% (+1.4% YoY) to 129.4%. Wood products: less than +0.1% (+0.4% YoY) at 120.1%; paper products: -0.1% (-1.1% YoY) to 105.3%.

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.

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.

October 2023 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) declined 0.6% in October (-0.3% expected). Manufacturing output fell 0.7%. Much of this decline was due to a 10% drop in the output of motor vehicles and parts that was affected by strikes at several major manufacturers of motor vehicles—the index for manufacturing excluding motor vehicles and parts edged up 0.1%. The index for utilities decreased 1.6%, and the output of mines increased 0.4%. Total IP in October was 0.7% below its year-earlier level. 

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Market Groups

The output of major market groups was mixed in October, with the drop in motor vehicles and parts output exerting downward pressure on a number of categories. The index for consumer durables dropped 5.8%, led by a 10.3% decrease in the index for automotive products, while the production of consumer nondurable goods edged up 0.1%. The output of business equipment moved down 0.5% because of a drop in the transit component. The index for defense and space equipment rose 1.7% in October, its 10th consecutive monthly increase. The index for construction supplies edged up 0.2% and business supplies moved down 0.4%. Within materials, the largest decline was in durable materials, which includes automotive parts.

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Industry Groups

Manufacturing output dropped 0.7% in October and was 1.7% below its year-earlier level. The index for durable manufacturing slid 1.3% in October, and the index for nondurable manufacturing edged down 0.1%. Other manufacturing (publishing and logging) moved up 0.5%.

Within durable manufacturing, the output of motor vehicles and parts posted the largest decline (10%). Elsewhere, decreases were also seen in the indexes for primary metals (1.7%) as well as furniture and related products (1.4%), while the largest increases were recorded by computer and electronic products (1.9%) as well as electrical equipment, appliances, and components (1.5%); wood products (-0.4%). Within nondurable manufacturing, gains in the indexes for petroleum and coal products (2.2%) and paper (0.7%) were offset by declines in the indexes for plastics and rubber products (2.2%) and chemicals (0.6%).

Mining output moved up 0.4% in October and was 2.2% above its year-earlier level. The index for utilities, however, dropped 1.6% in October but was 2.9% above its year-earlier level.

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Capacity utilization (CU) moved down 0.6 percentage point to 78.9% in October, a rate that is 0.8PP below its long-run (1972–2022) average.

Manufacturing CU moved down 0.6PP to 77.2% in October, a rate that is 1PP below its long-run (1972–2022) average; wood products: -0.4%; paper: +0.8%. The operating rate for mining increased 0.5PP to 94.3%, a rate that is 7.9PP above its long-run average. The operating rate for utilities decreased 1.3PP to 71.4%, 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 130.2% of 2017 output. Manufacturing also edged up by 0.1% (+1.4% YoY) to 129.1%. Wood products: less than +0.1% (+0.7% YoY) to 120.1%; paper products: -0.1% (-1.0% YoY) to 105.5%.

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.

September 2023 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) increased 0.3% in September (0.0% expected) and advanced at an annual rate of 2.5% in 3Q. Manufacturing output rose 0.4% in September, the index for mining moved up 0.4%, and the index for utilities decreased 0.3%. At 103.6% of its 2017 average, total industrial production in September was 0.1% above its year-earlier level. 

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Market Groups

Most major market groups recorded gains in September. The index for consumer durables rose 1.2% amid widespread increases in its components. On the other hand, the index for consumer nondurable goods was unchanged, as a gain in chemical products was offset by a decline in energy nondurable goods. The production of business equipment fell 0.7%, while the index for defense and space equipment recorded its fifth consecutive monthly gain of at least 1%. Within materials, the index for non-energy durables rose 0.8%, and the index for non-energy nondurables increased 0.5%.

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Industry Groups

Manufacturing output rose 0.4% in September but was 0.8% below its year-earlier level. In 3Q, factory output moved sideways, as a gain of 2.3% (annual rate) in the index for durable manufacturing was offset by a decline of 2.4% (annual rate) in the index for nondurable manufacturing.

In September, the index for motor vehicles and parts moved up only 0.3%, as motor vehicle assemblies were held down by the ongoing strike against three automakers. Elsewhere in manufacturing, gains of 1% or more were recorded by wood products (+2.4%), primary metals, and plastics and rubber products (paper products: +0.5%), and declines of 1% or more were recorded by apparel and leather as well as printing and support. Other manufacturing (publishing and logging) edged down 0.2% but posted a gain of 4.8% for 3Q as a whole.

Mining output moved up 0.4% in September for a fourth consecutive monthly gain. For 3Q, the output of mines advanced at an annual rate of 6.9%. The index for utilities dropped 0.3% in September but saw a 3Q gain of 15.2% (annual rate).

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Capacity utilization (CU) moved up 0.2 percentage point (PP) to 79.7% in September, a rate that is equal to its long-run (1972–2022) average.

Manufacturing CU edged up 0.1PP to 77.8% in September, a rate that is 0.4PP below its long-run (1972–2022) average (wood products: +2.4%; paper: +0.6%). The operating rate for mining increased 0.5PP to 95.1%, a rate that is 8.7PP above its long-run average. The operating rate for utilities decreased 0.4PP to 72.7%, 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 130.0% of 2017 output. Manufacturing also edged up by 0.1% (+1.4% YoY) to 128.9%. Wood products: less than +0.1% (+0.8% YoY) to 120.1%; paper products: -0.1% (-1.0% YoY) to 105.7%.

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.

August 2023 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) increased 0.4% in August (+0.1% expected), and manufacturing output inched up 0.1%. The August reading for manufacturing was held back by a drop of 5% in the output of motor vehicles and parts; factory output elsewhere rose 0.6%. The index for mining moved up 1.4%, and the index for utilities climbed 0.9%. At 103.5% of its 2017 average, total industrial production in August was 0.2% above its year-earlier level. 

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Market Groups

In August, the drop in the output of motor vehicles and parts contributed to declines in the indexes for consumer durables and transit equipment. Most of the other major market groups posted increases in August. The index for consumer nondurables moved up 0.4%, and the index for materials advanced 0.7%. Within materials, energy materials rose 1.5%, while non-energy materials edged up 0.1%. The production of defense and space equipment jumped 3.5% in August and was up over 10% from its year-earlier level.

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Industry Groups

Manufacturing output rose 0.1% in August for its second consecutive monthly gain but was 0.6% below its year-earlier level (NAICS manufacturing: +0.1% MoM; -0.7% YoY). The index for durable manufacturing edged up 0.1% in August, and the index for nondurable manufacturing increased 0.2%. Other manufacturing (publishing and logging) moved down 0.2%.

Within durable manufacturing, gains of more than 1% were recorded by primary metals (1.6%); machinery (2.0%); aerospace and miscellaneous transportation equipment (3.3%); furniture and related products (1.3%); and miscellaneous (1.5%). Apart from the large drop in the index for motor vehicles and parts, small declines—all less than 1%—were registered by wood products (-0.4%); nonmetallic mineral products; fabricated metal products; and electrical equipment, appliances, and components. Despite the August drop in the output of motor vehicles and parts, the index was 5.9% above its year-earlier level. Within nondurable manufacturing, gains of 1% or more in August in the indexes for printing and support and for chemicals were partially offset by declines elsewhere (e.g., paper products: -0.3%).

In August, mining output rose 1.4% and was 3.9% above its year-earlier level. The August gain in mining resulted primarily from an increase of over 3% in the index for oil and gas extraction. The output of utilities rose 0.9%.

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Capacity utilization (CU) moved up to 79.7% in August, in line with its long-run (1972–2022) average.

Manufacturing CU remained at 77.9% in August, a rate that is 0.3 percentage point (PP) below its long-run (1972–2022) average (wood products: -0.4%; paper: -0.2%). The operating rate for mining jumped 1.4PP to 94.3%, 7.9PP above its long-run average. The operating rate for utilities rose 0.4PP to 73.0%, well below its long-run average.

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Capacity at the all-industries level increased by 0.1% MoM (+1.6% YoY) to 129.9% of 2017 output. Manufacturing also edged up by 0.1% (+1.4% YoY) to 128.8%. Wood products: less than +0.1% (+0.9% YoY) to 120.1%; paper products: -0.1% (-0.9% YoY) to 105.6%.

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.

July 2023 Industrial Production, Capacity Utilization and Capacity

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In July, total industrial production (IP) increased 1.0% (+0.3% expected) following declines in the previous two months. Manufacturing output rose 0.5% in July; the production of motor vehicles and parts jumped 5.2%, while factory output elsewhere edged up 0.1%. The index for mining moved up 0.5%, and the index for utilities climbed 5.4% as very high temperatures in July raised demand for cooling. At 102.9% of its 2017 average, total industrial production in July was 0.2% below its year-earlier level. 

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Market Groups

Most major market groups recorded growth in July. The production of consumer durables was boosted by a jump of 4.8% in the output of automotive products. Similarly, the abnormally hot weather in July lifted the indexes of energy consumer goods and energy materials, which advanced 3.7% and 2.1%, respectively. Elsewhere, there were gains of 1% in consumer nondurables, business equipment, as well as defense and space equipment. Of the major market groups, construction supplies recorded the only decline.

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Industry Groups

Manufacturing output rose 0.5% in July; however, the growth rates for the previous three months were revised down. Altogether, the index for manufacturing in July was 0.7% below its year-earlier level. In July, the indexes for durable and nondurable manufacturing increased 0.8% and 0.1%, respectively. Other manufacturing (publishing and logging) advanced 1.3%.

Within durable manufacturing, gains of 1% or more were registered by motor vehicles and parts (5.2%), machinery (1.3%), and computer and electronic products (1.0%). In contrast, losses of 1% or more were recorded by electrical equipment, appliances, and components (1.7%); primary metals (1.2%); and furniture and related products (1.2%). Within nondurable manufacturing, modest declines in the indexes of paper, of plastics and rubber products, and of apparel and leather were more than offset by gains elsewhere. Wood products: -0.7%; paper products: -0.7%.

Mining output grew 0.5% in July and was 2.0% above its year-earlier level. The output of utilities climbed 5.4% in July, bolstered by a jump of 6.7% for electric utilities.

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Capacity utilization (CU) moved up to 79.3% in July, a rate that is 0.4 percentage point (PP) below its long-run (1972–2022) average.

Manufacturing CU edged up to 77.8% in July, a rate that is 0.4PP below its long-run (1972–2022) average (wood products: +0.6%; paper: 0.0%). The operating rate for mining moved up 0.6PP to 92.4%, 6PP above its long-run average. The operating rate for utilities strengthened 3.5PP to 72.3%, well below its long-run average.

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Capacity at the all-industries level increased by 0.1% MoM (+1.6% YoY) to 129.7% of 2017 output. Manufacturing also edged up by 0.1% (+1.4% YoY) to 128.6%. Wood products: less than +0.1% (+1.1% YoY) to 120.1%; paper: -0.1% (-0.8% YoY) to 105.9%.

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.

June 2023 Industrial Production, Capacity Utilization and Capacity

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Total industrial production (IP) declined 0.5% in June for a second consecutive month (0.0% expected) but advanced 0.7% at an annual rate for 2Q as a whole. Manufacturing output moved down 0.3% in June but rose 1.5% in 2Q. In June, the indexes for mining and utilities fell 0.2% and 2.6%, respectively. At 102.2% of its 2017 average, total IP in June was 0.4% below its year-earlier level. 

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Market Groups

Most major market groups posted declines in June. The index for consumer durables fell 2.7%, led by notable decreases in the output of appliances, furniture, and carpeting (3.8%) and of automotive products (3.6%). The decrease of 0.9% in the index for consumer nondurables reflected declines in clothing (2.1%), energy (1.8%), and food and tobacco (1.3%). Within business equipment, an increase in the index for information processing was offset by decreases in the indexes for transit and for industrial and other. Defense and space equipment posted the only gain of 1.5% or greater among the market groups.

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Industry Groups

Manufacturing output moved down 0.3% in June. For the second quarter, factory output moved up 1.5% at an annual rate, buttressed by a second-quarter jump of 36.7% in the production of motor vehicles and parts during the quarter. In June, the indexes for nondurable manufacturing and durable manufacturing fell 0.6% and 0.1%, respectively; the index for other manufacturing (publishing and logging) edged down 0.2%. Within nondurables, only chemicals recorded an increase, whereas decreases of at least 1% were recorded by most other industries (paper products: 0.0%). Notable declines occurred in the indexes for printing and support (2.5%) and petroleum and coal products (1.6%). The index for durable manufacturing, on the other hand, posted more mixed results in June, with declines in the output of motor vehicles and parts (3.0%) and of nonmetallic mineral products (1.2%) being mostly offset by gains elsewhere (wood products: +1.9%).

Mining output inched down 0.2% in June and declined 1.1% at an annual rate in 2Q. Within mining, a drop of 2.8% in the index for oil and gas well drilling in June was nearly offset by a gain in oil and gas extraction. The output of utilities fell 2.6% in June and 2.0% in 2Q.

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Capacity utilization (CU) stepped down to 78.9% in June, a rate that is 0.8 percentage point (PP) below its long-run (1972–2022) average.

Manufacturing CU edged down to 78.0% in June, a rate that is 0.2PP below its long-run (1972–2022) average (wood products: +1.8%; paper: +0.1%). The operating rate for mining ticked down 0.1PP to 91.6%, and the operating rate for utilities dropped 2.1PP to 68.5%. The rate for mining was 5.2PP above its long-run average, while the rate for utilities remained well below its long-run average.

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Capacity at the all-industries level increased by 0.1% MoM (+1.6% YoY) to 129.6% of 2017 output. Manufacturing also edged up by 0.1% (+1.4% YoY) to 128.5%. Wood products: 0.0% (+1.2% YoY) at 120.0%; paper: -0.1% (-0.8% YoY) to 106.0%.

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.