Industrial Production Unchanged in April

By May 15, 2015Economy

Manufacturing production was unchanged in April, slowing from the 0.3 percent gain experienced in March. Overall, output in the sector has been very soft for five straight months. Manufacturers have struggled with a number of significant headwinds in the U.S. and global economies, including challenges in growing exports, residual impacts from the West Coast ports slowdown, regional weather challenges and an anxious consumer. As a result, the year-over-year pace has slowed from 4.5 percent in November to 2.3 percent in April.  Similarly, capacity utilization in manufacturing has dropped from 79.8 percent five months ago to 78.2 percent today.

Durable goods production increased 0.1 percent in April, with output for nondurable goods firms off 0.1 percent. There were strong increases for manufacturing production for nonmetallic mineral products (up 1.4 percent), electrical equipment and appliances (up 1.3 percent), motor vehicles and parts (up 1.3 percent) and wood products (up 1.3 percent). However, these were offset by declining output in the machinery (down 0.9 percent), aerospace and miscellaneous transportation equipment (down 0.6 percent), and food, beverage and tobacco products (down 0.6 percent) sectors, among others.

In the larger economy, total industrial production declined 0.3 percent in April, falling for the fifth consecutive month. While manufacturing output was flat in April, there were decreased production measures for both mining (down 0.8 percent) and utilities (down 1.3 percent). Industrial production has increased 1.9 percent since April 2014, with the year-over-year rate down from 4.8 percent in November.

Because of these headwinds facing manufacturers, now is the time for our policy makers in Washington to lead on important issues like trade and Trade Promotion Authority, infrastructure, taxes and energy and environmental regulations such as ozone and greenhouse gases.  Just yesterday, the Senate began debate on Trade Promotion Authority, key legislation which would help manufacturers global competitiveness and access to the 95% of the world’s customers who live outside the U.S. borders.  The clock is ticking and manufacturers continue to be left behind.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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