Tabs

Tuesday, August 17, 2010

Industrial Production Up 1.0%, Manufacturing Up 1.1%

In July, industrial production had a strong showing, rising 1.0% over the month. This follows a slight decline of 0.1% in June. The increase was primarily due to a 1.1% rise in manufacturing output. This area has been somewhat volatile in recent months. July’s rise follows a drop of 0.5% in June.

The increase was primarily driven by a 9.9% jump in auto production, which was in part due to GM not engaging in its usually seasonal plant retooling. Still, even without autos included, manufacturing output grew 0.6%, boosted by another month of strong growth in business equipment production. Non-durable goods manufacturing grew by a much small 0.1%.

Mining output rose 0.9%, while utilities output rose 0.1%. The latter category rose heavily in the prior two months and remained at a high level in July. This was in large part due to high seasonal temperatures driving up air-conditioning related electricity demand.

The capacity utilization rate rose 0.7 points to 74.8%. There still remains heavy productive slack; however, the utilization rate is considerably higher than its lows of last year. It will have to continue to increase in order to drive significant capital expenditures and payroll expansion.


Source: Federal Reserve

1 comment:

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