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Manufacturing output posts largest increase in 10 months

Posted by IndustryNet on Friday, January 18, 2019


100000327_WASHINGTON_Boeings_Everett_factory_near_SeattleU.S. industrial output edged up in December, and manufacturing output surged, according to a new report released this morning by the Federal Reserve.

 The Federal Reserve’s latest release on U.S. industrial production and capacity utilization showed industrial output rose one third of one percent in December, led by a 1.1% gain in manufacturing output.

This represents the largest month-over-month increase for the U.S. manufacturing sector in ten months.

Manufacturing gains were led by motor vehicle production in December, though primary metals output outpaced all other sectors in 2018.

Related: Where U.S. aluminim foundries are thriving

Manufacturing and mining leads nation’s industrial output gains

Mining output outpaced overall gains, rising 1.5% in December, while manufacturing output was a close second, rising 1.1%. These gains were offset by a 6.3% drop in utility utilization.

Capacity utilization remained steady, inching up 0.1% in December to its current level of 78.7%. This is 1.1% lower than the utilization rates long-run average (1972-2017) according to the Fed.

Overall, total industrial output for the U.S. rose 3.8% in the 4th quarter of 2018. Taking a year-over-year view, industrial output was 4% higher than December 2017.fredgrapH_manufacturing_production

Strong gains industrial capacity utilization over year

Capacity utilization, which measures the extent to which industrial firms make use of their productive capacity, increased 2.1% overall from December 2017-December 2018.

Mining led the increase in capacity utilization, growing 6% over the year, with current utilization at 94.8%. Manufacturing capacity utilization rose 1.4% year-over-year and now stands at 76.5%, while utilities rose 2% over the year to 75%.

Industrial output gains by industry

Breaking down the manufacturing output gains, durable goods manufacturing led the way in terms of output, rising 1.3%, while non-durable goods manufacturing rose 0.9%.

Durable manufacturing output gains in December were led by the auto industry, with output in motor vehicles and parts gaining 4.7%. Taking a year-over-year look, motor vehicle parts output has grown by 7.8% December 2017-December 2018.

Other industries increasing in output included nonmetallic mineral products (+2.8%); wood products (+1.8%); aerospace and miscellaneous transportation equipment (+1.7%); and computer/electronic products (+1.3%).

Year-over-year, however, the primary metals posted the largest increase in output, up 8.4% from December 2017 and December 2018, pointing to an increase in domestic metals production, possibly in response to tariffs on imported steel and other primary metals.

This chart illustrates the year-over-year gain in primary metals output:

fredgraph_primarymetal

Related: USTR finalizes tariffs on half of all Chinese imports

Non-durable goods output gains were overwhelmingly led by petroleum and coal products, which rose 3.5% in December (though only 0.7% year-over-year), while all other industries were largely unchanged.

Year-over-year, chemical processing output rose the most at 3.6%; while apparel and leather output sank 5.5% and printing and related support activities fell 2.8%.

U.S. manufacturing remains in growth mode

Overall, U.S. manufacturing has been in expansion mode for nearly two years, with the ISM recently reporting the sector’s 34th consecutive month of growth, and the Labor Department recently finding the sector had added a record number of manufacturing jobs in 2018.

Recent data collected by IndustryNet also points to industrial growth in December, with the states of New Hampshire and Idaho posting a significant gain in manufacturing jobs, while U.S. waterjet cutting companies reported impressive sales growth.

Finding domestic suppliers

As U.S. manufacturing grows and changes, IndustryNet continually updates information on over 400,000 U.S. manufacturers and suppliers of more than 10,000 products and services. IndustryNet lists suppliers across a range of industries, producing everything from steel and aluminum to air compressors, conveyor belts and printed circuit boards.

Visitors can set up a free user account, build custom lists of potential suppliers, send quote requests, download catalogs, view company photo and video libraries, and more.

IndustryNet is also a direct path for U.S manufacturers to increase their visibility among domestic industrial procurers.

 

 

 

 

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