The Federal Reserve Board reported that industrial production rose 0.4 percent in December, rebounding from the 0.3 percent drop in November. Year-over-year growth in industrial production is up 2.9 percent. Meanwhile, manufacturers’ capacity utilization edged higher from 75.3 percent to 75.9 percent for the month.

For the manufacturing sector, production rose 0.9 percent, led by healthy increases in both durables (up 0.9 percent) and nondurables (up 0.8 percent). Since December 2010, manufacturing production increased by 4 percent, with durable goods production increasing by 7.1 percent for the year. Nondurable goods production rose 0.8 percent year-over-year.

The largest monthly gains were in wood products (up 4.2 percent), primary metals (up 3.2 percent), machinery (up 2.1 percent) and plastics and rubber products (up 1.6 percent). Declining sectors included aerospace and miscellaneous transportation products (down 1.2 percent), paper (down 1 percent), nonmetallic mineral products (down 0.8 percent) and furniture and related products (down 0.8 percent).

These numbers suggest that manufacturing production is rebounding from weaknesses in recent months. The 0.9 percent growth rate in December was the highest level since December 2010 – a sign of strength as we move into 2012. More importantly, the gain was more broad-based than in recent months, with both durable and nondurable goods manufacturing activity picking up.

Domestic industrial production is expected to grow at a moderate pace this year. While a number of significant headwinds might derail these predictions – including the developments in Europe – manufacturers by-and-large remain optimistic about activity over the coming months. It will be important for policymakers to adopt pro-growth policies that will enable these optimistic sentiments to come to fruition.

Chad Moutray is Chief Economist, National Association of Manufacturers.

The Federal Reserve Board reported that industrial production dropped 0.2 percent in November, weaker than expected and reversing October’s strong 0.7 percent increase. For the manufacturing sector, production fell 0.4 percent, its first decline since April. Year-over-year growth in manufacturing production is up 3.8 percent. Meanwhile, manufacturers’ capacity utilization dropped from 75.6 percent to 75.3 percent for the month.

In terms of manufacturing production, eight sectors experienced gains, with eleven having declines. Both durable and nondurable goods production fell for the month, down 0.1 percent and 0.4 percent, respectively. The largest declines were in motor vehicles and parts (down 3.4 percent), electronic equipment, appliances and components (down 1.8 percent), wood products (down 1.7 percent), printing and support (down 1.3 percent) and apparel and leather (down 1.1 percent).

Despite the overall decline, some sectors experienced increased production in November. The largest gains were in aerospace and miscellaneous transportation (up 2.1 percent), primary metals (up 1.8 percent) and paper (up 1.1 percent). In addition, overall production levels are higher for the year, with durable goods production up 7.1 percent and nondurables up 1.3 percent since November 2010.

There have been improvements in the manufacturing sector and overall domestic economy in recent months, and yet, today’s industrial production numbers show that weaknesses remain. The decrease in motor vehicle production was the biggest story – assisted by supply issues resulting from floods in Thailand and other issues. Nonetheless, even with auto production is excluded, manufacturing output fell by 0.2 percent.

The larger forecast for industrial production moving into 2012 is a positive one, suggesting modest growth for the sector for the new year. Nonetheless, weaknesses persist in the marketplace, and a number of headwinds – including developments in Europe – perpetuate anxieties among businesses and the public. It will be important to adopt pro-growth policies to help boost production and U.S. economic activity so that we can move beyond these weaknesses.

Chad Moutray is chief economist, National Association of Manufacturers.

The Federal Reserve Board reported that industrial production rose 0.7 percent in October, beating expectations and reversing the 0.1 percent decline in September. For the manufacturing sector, production rose 0.5 percent, its fourth straight monthly increase. Year-over-year growth in manufacturing production is up 4.1 percent.

Meanwhile, manufacturers’ capacity utilization increased 0.1 percent, or 0.7 percent since October 2010.

In terms of manufacturing production, eleven sectors experienced gains, with eight having declines. Durable and nondurable goods production were up 0.8 percent and 0.2 percent, respectively. The sectors with the greatest increases were: motor vehicles and parts (up 3.1 percent), apparel and leather (up 2.8 percent), aerospace and miscellaneous transportation (up 2.1 percent) and electrical equipment and appliances (up 2 percent).

Today’s report shows that manufacturing activity has picked up the pace from weaknesses seen in recent months. This is especially true in the durable goods sector, but nondurable goods industries are also doing better. Given that the consensus forecasts for industrial production had been in the 0.3 to 0.4 percent range, the strength of this growth is particularly heartening.

Manufacturers continue to respond to surveys suggesting high expectations for growth in new orders, production, employment and capital spending over the next six months. The survey from the New York Federal Reserve Bank yesterday was consistent with this, even as its measures of current production suggested a still-weak environment.

Moving forward, I would anticipate continued recovery in the manufacturing sector, with businesses closely following economic and political developments both here and abroad. The economic recovery – particularly for manufacturers – is still a fragile one that could be offset by economic challenges.

Chad Moutray is chief economist, National Association of Manufacturers.

Today’s manufacturing numbers have a bit of déjà vu to them, with industrial production up at the same time that business conditions in the New York region continues to contract.

First, the Federal Reserve reported that industrial production rose 0.2 percent in September, with the August figures revised to indicate that there was no change last month. The numbers in August had previously been reported to be up 0.2 percent. For the manufacturing sector, production rose 0.4 percent in September, building on the 0.7 percent and 0.3 percent increases in July and August. Year-over-year growth in manufacturing production is nearly 4 percent.

Meanwhile, manufacturers’ capacity utilization increased 0.1 percent, from 77.3 in August to 77.4 in September.

Examining the different sectors, the picture is more mixed. Eleven of the sectors experienced gains in production, and eight had declines. Durable and nondurable goods production were up 0.6 percent and 0.2 percent. The sectors with the greatest increases were: wood products (up 2.4 percent), aerospace and miscellaneous transportation (up 2.3 percent), electrical equipment and appliances (up 1.3 percent), paper (up 1.1 percent) and computer and electrical products (up 1 percent). The largest declines were in furniture and related products (down 2.2 percent), apparel and leather (down 1.2 percent) and nonmetallic mineral products (down 0.9 percent).

Overall, these numbers show that manufacturing has experienced reasonable growth in the third quarter of 2011. Manufacturing industrial production is 1.4 percent higher in September than in June (or 5.75 percent at an annual growth rate). That is impressive, and a sign that the sector is starting to improve after a weak second quarter. The durable goods sectors have helped to add significantly to those totals. Moving forward, it will be important for these numbers to continue this growth. (continue reading…)

The Federal Reserve reported that industrial production was up 0.9 percent in July, building on the gains in May and June. On a year-over-year basis, industrial production has increased 3.7 percent. Likewise, manufacturing production rose 0.6 percent in July, after growing by 0.2 percent in each of the previous two months. Manufacturers’ capacity utilization also edged higher in July by 0.2 percent.

This report shows that manufacturing production is starting the third quarter off much stronger than it did the second quarter. Leading the charge is the motor vehicle sector. In fact, if you were to exclude the motor vehicle sector, manufacturing production would have risen just 0.3 percent. This is yet another sign that the automotive sector is beginning to recover from its supply chain challenges of the spring that resulted from the Japanese earthquake and subsequent tsunami. However, while the rest of the industry is experiencing gains, they continue to be modest.

Looking at specific industry groups within manufacturing, all but 4 of the 19 sectors experienced gains – a sign that the increased production was relatively broad-based. The sectors with the strongest monthly increases include: motor vehicles and parts (up 5.2 percent), primary metals (up 1.7 percent), aerospace and miscellaneous transportation equipment (up 1.3 percent) and plastics and rubber products (up 1.1 percent).

The largest declines were in electrical equipment, appliances and components (down 2.3 percent) and apparel and leather (down 1.8 percent). Production in durable goods rose 1 percent for the month and 6.6 percent for the year; whereas, nondurables rose 0.3 percent and 1.7 percent, respectively.

It is notable that this survey comes on the heels of the downbeat Empire State Manufacturing Survey released yesterday. That report from the New York Federal Reserve Bank seemed to echo the sentiment of many others by reporting a manufacturing sector with fewer new orders and less production. Let’s hope that today’s industrial production figures bode well for future growth.

Chad Moutray is chief economist, National Association of Manufacturers.

The Federal Reserve reported that industrial production was up 0.2 percent in June, reversing two months of declines. Manufacturing production was unchanged from May, with a year-over-year increase of 3.7 percent. Excluding motor vehicles and parts, manufacturing production would have risen 0.2 percent. Manufacturers’ capacity utilization figures were also unchanged.

In June, the production of nondurable goods was up 0.1 percent, while durables were flat. Over the past year, however, durable goods production (up 6.8 percent) has outstripped nondurables (up 1.4 percent). The largest monthly gainers were primary metals (up 1.6 percent), miscellaneous manufacturing (up 0.9 percent), and petroleum and coal products (up 0.8 percent). Motor vehicle and parts production was down 2.0 percent, reflecting continued supply disruptions due to the Japanese disaster earlier this year. Other decliners included furniture and related products (down 2.1 percent), wood products (down 1.2 percent), and printing and support (down 1.0 percent).

Overall, these numbers show an economy the struggled mightily in the second quarter of 2011.  Other measures of manufacturing activity, such as the ISM purchasing managers’ index and some of the regional Federal Reserve Bank surveys, have been more upbeat on the latest statistics. This survey, while positive, finds that some of the challenges faced in March, April, and May – such as the supply-chain disruptions stemming from the Japanese disaster – persist. Indeed, ten of the major manufacturing industries experienced declines in production this month, compared to nine that saw increases.

While I continue to be optimistic about the third and fourth quarters of this year, it is definitely a cautious optimism.

The Federal Reserve reported that industrial production was up 0.1 percent in May, up from being flat in April. Manufacturing production was up 0.4 percent, reversing a decline in the previous month, with a year-over-year increase of 3.7 percent. Manufacturers’ capacity utilization figures were up from 74.2 to 74.5, mirroring the industrial production trend.

Durable goods production increases have outstripped nondurables over the past year (up 6.7 percent and 1.4 percent, respectively). In May, the strongest gainers were furniture and related products (up 2.6 percent), petroleum and coal products (up 2.0 percent), nonmetallic mineral products (up 1.8 percent), machinery (up 1.7 percent), computer and electronic products (up 1.4 percent), and textile and product mills (up 1.4 percent). Motor vehicle and parts production was down 1.5 percent, reflecting continued supply disruptions due to the Japanese disaster earlier this year; however, this was an improvement from the 6.5 percent drop in April.

Meanwhile, the Empire State Manufacturing Survey from the Federal Reserve Bank of New York found that manufacturing output fell in its June survey, with the index for overall business conditions falling below zero to -7.8. New orders and shipments were down dramatically. In a series of special questions, 41 percent of respondents expected their workforce to increase over the course of the next year, which was down from a similar set of questions posed in January.

In general, the survey suggests that manufacturers in New York have a positive viewpoint of future business conditions, new orders, shipments and employment, but the indices for each of these has fallen over the past few months, suggesting deterioration in overall optimism. (continue reading…)

Much of the economic data over the past couple weeks have shown manufacturing cooling somewhat in April, after strong growth in previous months. Today’s report from the Federal Reserve Board on industrial production mirrors this finding. While total industrial production was unchanged, manufacturing production fell 0.4 percent in April. Year-over-year growth in manufacturing production was 4.6 percent, reflecting the strong increases from previous months.

Prior to this month’s decline, the index had risen for nine consecutive months. Manufacturers’ capacity utilization figures also dropped in April from 74.8 to 74.4.  Supply disruptions due to the Japanese earthquake and subsequent tsunami were one of the main reasons for the decline in April. Excluding the auto sector, industrial production actually rose 0.2 percent. (continue reading…)

After edging down 0.2 percent in September, the Federal Reserve reported today that industrial production was flat in October. A 0.6-percent rise in manufacturing production was offset by declines in mining and utilities production. Following very sluggish growth during the past several months, the October increase in manufacturing production was primarily due to two factors.

First, the recent upturn in housing activity fueled increases in the production of wood products, nonmetallic minerals and electrical equipment and appliances, all of which posted healthy production gains in excess of 2 percent last month. 

Second, continued growth in business investment and exports drove noticeable upturns in the production of machinery, computers and electronic products in October. This is a positive sign that businesses are now replacing equipment that has become outdated — actions that were likely delayed during the recession. At the same time, with over half of the growth in machinery output driven by sales abroad over the past year, today’s report is good news on the export front. Solid growth in exports over the past year has been one component of the recovery that has outperformed most prior recoveries and one of the main reasons manufacturing has been outpacing the overall recovery.

One area of weakness continues to be consumer-related. The production of consumer goods was flat in October after declining each of the prior two months. Retail inventory-to-sales ratios have increased in recent months to their highest levels since last October. As retailers reduce excess inventory stocks, this will likely curtail both production and imports of consumer goods over the next several months.

After six consecutive monthly increases, the Federal Reserve reported today that industrial production fell by 0.2 percent in September, the largest decrease since May 2009.

Making up 72 percent of overall industrial production, the overall decline was mainly caused by a 0.1 percent fall in manufacturing production in September.  And for the third quarter overall, manufacturing production only increased at an annual rate of 4 percent, less than half the 8.7 percent pace achieved during the prior four quarters. 

The fact that the September decline in manufacturing production came right after a sharp deceleration from 0.7 percent growth in July to 0.2 percent growth in August is a concerning sign that even though manufacturing continued to recover last quarter, it has lost steam over the last three months ending in September. The drop in manufacturing production last month was mainly due to a 0.2 percent drop in durable goods industries, which more than offset a modest 0.1 percent increase in the nondurable goods sector.

Within durable goods, the drop in output was very diffuse, with eight of the eleven major manufacturing industries posting declines.  The industry declines ranged from capital goods such as machinery, aerospace, computers and electrical equipment to supplies such as wood products, furniture, fabricated metals and primary metals.  For half of these industries, this was the second consecutive monthly decline.

With most of the fiscal stimulus and inventory rebuild now in the past, today’s report adds to the mounting evidence that the manufacturing recovery has decelerated significantly from the robust growth achieved earlier in the year.  And with increased business uncertainty building due to possible policy changes from Washington, lawmakers should take note of today’s report and pause before enacting any measures that would undercut the economic recovery, which clearly is weakening.