Manufacturing Production Edged Down Slightly in November Following Two Months of Gains

The Federal Reserve said that manufacturing production edged down slightly in November, off 0.1 percent, after experiencing gains in both September and October. Manufacturers have struggled to increase demand over the past couple years, with a strong dollar and global headwinds dampening overall activity, but recent sentiment surveys – including the most recent one from the NAM – have reflected a rebound in activity. In that light, the latest production data serve as a disappointment, continuing to highlight ongoing struggles for the sector, even as other segments have seen progress. Along those lines, manufacturing production has risen just 0.1 percent on a year-over-year basis, suggesting essentially stagnant growth over the past 12 months. Manufacturing capacity utilization was also lower for the month, down from 74.9 percent to 74.8 percent. That was off from the 75.3 percent rate observed one year ago.  

Looking more closely at the November manufacturing data, nondurable goods production increased by 0.3 percent, but output from durable goods manufacturers decreased by 0.2 percent. The largest increases for the month were in petroleum and coal products (up 3.3 percent), primary metals (up 2.3 percent), miscellaneous durable goods (up 1.1 percent) and nonmetallic mineral products (up 1.1 percent). In contrast, motor vehicles and parts (down 2.3 percent), machinery (down 1.5 percent), plastics and rubber products (down 1.4 percent) and electrical equipment and appliances (down 1.1 percent) saw declining production in November.

Meanwhile, total industrial production declined by 0.4 percent in November, falling for the third time in the past four months. In addition to manufacturing, utilities production was also lower, down 4.4 percent; whereas, mining output increased for the second straight month, up 1.1 percent. Over the past 12 months, mining and utilities production have decreased 4.6 percent and 1.9 percent. Overall, total industrial production fell 0.6 percent year-over-year, remaining in negative territory for the 15th straight month largely on the drag from mining activity. Capacity utilization was down, as well, from 75.4 percent in October to 75.0 percent in November.

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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