The Federal Reserve said that manufacturing production rose for the fourth straight month in December, edging up by 0.1 percent. While this was slower than the 0.3 percent gain seen in November and while we might prefer increases that were more broad-based for the month, the data remain encouraging overall. Indeed, manufacturing production has risen by 2.4 percent over the past 12 months, down from 2.5 percent in November, which was the best year-over-year rate since July 2014. In a similar manner, manufacturing capacity utilization matched November’s rate of 76.4 percent, a reading not seen since May 2008.
With that said, there has been a lot of volatility in the month-to-month data since the spring, with more recent figures whipped around by hurricanes. Along those lines, the underlying data in December were mixed. Durable goods production was up by 0.3 percent for the month, rising for the fifth consecutive month; whereas, output among nondurable goods businesses was off by 0.1 percent in December, pulling back slightly after two months of gains.
The largest monthly increases in the manufacturing sector were in the motor vehicles and parts (up 2.0 percent), textile and product mills (up 1.3 percent), wood products (up 0.8 percent), printing and support (up 0.7 percent) and food, beverage and tobacco products (up 0.6 percent) sectors. In contrast, production was lower for primary metals (down 1.5 percent), furniture and related products (down 1.3 percent), plastics and rubber products (down 0.9 percent), chemicals (down 0.7 percent) and petroleum and coal products (down 0.7 percent), among others.
Since December 2016, the following manufacturing sectors experienced the fastest year-over-year gains: machinery (up 8.2 percent), nonmetallic mineral products (up 5.1 percent), fabricated metal products (up 4.7 percent), food, beverage and tobacco products (up 3.8 percent), chemicals (up 3.3 percent), primary metals (up 3.2 percent), electrical equipment and appliances (up 3.1 percent) and plastics and rubber products (up 3.0 percent).
Meanwhile, total industrial production jumped 0.9 percent in December, bouncing back after falling by 0.1 percent in November. In addition to manufacturing, both mining and utilities production were higher, up 1.6 percent and 5.6 percent, respectively. Utilities benefited from colder temperatures. Over the past 12 months, industrial production has risen 3.6 percent, its highest rate since November 2014. Mining and utilities output increased 11.5 percent and 1.8 percent year-over-year, respectively. In addition, capacity utilization soared from 77.2 percent to 77.9 percent, its strongest rate since February 2015.