Manufacturing production rose 0.5 percent in January, rebounding from softness in the second half of 2015 and providing a little encouragement at the start of the new year. Manufacturing activity remains softer-than-desired, particularly given difficulties in growing export demand and with falling commodity prices. Over the course of the past year, manufacturing output has increased 1.2 percent, representing some progress from the 0.5 percent pace observed in the prior report. Yet, production has slowed considerably since January 2015, when the year-over-year rate was a more-robust 4.3 percent. Capacity utilization for manufacturers rose from 75.8 percent in December to 76.1 percent in January.
Durable and nondurable goods production were both higher for the month, up 0.5 percent and 0.4 percent, respectively. The largest gains were seen in the motor vehicles and parts (up 2.8 percent), primary metals (up 2.1 percent), furniture and related products (up 1.4 percent), wood products (up 1.2 percent) and chemicals (up 1.1 percent) sectors. In contrast, apparel and leather (down 2.1 percent), printing and support (down 1.8 percent), electrical equipment and appliances (down 1.3 percent), plastics and rubber products (down 0.7 percent), aerospace and other transportation equipment (down 0.6 percent) and nonmetallic mineral products (down 0.5 percent) were among those sectors with declining output in January.
Meanwhile, total industrial production jumped 0.9 percent in January, reversing three consecutive months of declines. The headline number was boosted by stronger utilities output (up 5.4 percent), likely due to severe winter weather. Mining production was unchanged for the month. Capacity utilization also improved, up from 76.4 percent in December to 77.1 percent in January, its highest level in three months. Over the past 12 months, industrial production has declined 0.7 percent, pulled lower by 9.8 percent and 2.8 percent year-over-year declines in mining and utilities, respectively.
Latest posts by Chad Moutray (see all)
- Philly Fed: Manufacturing Activity Accelerated in February at Strongest Rate since November 1983 - February 16, 2017
- Housing Starts Ease a Bit in January but Remain Mostly Encouraging - February 16, 2017
- Consumer Prices Increased 2.5% Year-Over-Year in January, the Highest since March 2012 - February 15, 2017