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U.S. Industrial Production Falls 1.2 percent in August

Manufacturing output decreased 0.7 percent in August after having risen 0.4 percent in both June and July.

A newly released Federal Reserve Report showed industrial production in the U.S. fell by 1.2 percent during the month of August. Analysts cite the negative effect of precautionary shutdowns of oil and gas rigs in the Gulf Region, as well as a reduction in the output of durable goods during the month. 

Some highlights from the report: 

Market Groups

The production of consumer goods decreased 1.2 percent in August after having increased 0.4 percent in July. The output of durable consumer goods dropped 2.9 percent in August, while the output of consumer nondurables decreased 0.7 percent. Among durable consumer goods categories, the production of automotive products fell 4.7 percent.

Within nondurables, the production of non-energy goods moved down 0.2 percent. Clothing, chemical products, and paper products all contributed to the decrease, while the output of foods and tobacco was unchanged. The index for consumer energy products dropped 2.1 percent, a decrease driven by a fall in residential electricity sales.

The output of business equipment moved down 0.2 percent in August but was 11.4 percent above its year-earlier level. After having increased for seven consecutive months, the production of transit equipment declined 0.4 percent in August as a result of a decrease in motor vehicle assemblies. The output of information processing equipment moved down 0.3 percent, while the index for industrial and other equipment was unchanged.

Among nonindustrial supplies, the output of construction supplies edged down 0.1 percent in August, a fourth consecutive monthly decline. In addition, a decrease of 1.3 percent in the production of business supplies reversed the cumulative gain in the index over the previous four months.

The output of materials to be processed further in the industrial sector decreased 1.5 percent in August, with losses in all of its major components. The output of durable materials fell 1.1 percent. A drop of 3.4 percent in the index for consumer parts followed a jump of 4.4 percent in July; the largest contributors to this swing were categories related to motor vehicles. The output of equipment parts moved down 1.3 percent in August, a second consecutive large monthly decline. The production of nondurable materials decreased 0.3 percent.  The index for energy materials fell 2.7 percent, driven by decreases in oil and natural gas extraction.

On the upside, the output of defense and space equipment moved up 0.5 percent in August; production had jumped 1.9 percent in July, as workers returned from a labor strike at a major military aircraft manufacturing facility. The level of the index in August was 3.8 percent above its year-earlier level.

Industry Groups

Manufacturing output decreased 0.7 percent in August, but it remained 3.8 percent above its year-earlier level. The factory operating rate moved down 0.7 percentage point in August to 77.0 percent, a level 1.8 percentage points below its long-run average.

The production index for durable goods decreased 1.1 percent in August. Declines were widespread among the major durable goods industries, with the largest drop coming in motor vehicles and parts. Only primary metals posted an increase.

The production of nondurables moved down 0.4 percent in August. The indexes for all major components of nondurables fell, and decreases of 1.0 percent or more were recorded in textile and product mills, in apparel and leather, and in plastics and rubber products. Mining output retreated 1.8 percent, led by a significant decline in oil and gas extraction.

A separate report released by the Institute for Supply Management showed similar softness on the manufacturing front. The bellwether PMI Index--a measure of confidence among inventory managers and purchasing executives--fell to its lowest level in 12 months.

The complete August U.S. industrial report, which includes historical data and deeper analysis, is available online.

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Aerospace  •  Automotive  •  Defense & Military  •  Electronics  •  Industry Trends & Happenings

 

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