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IndustryNet Blog

U.S. manufacturing output accelerates for a fifth straight month

Posted by IndustryNet on Monday, November 19, 2018

100000303_manufacturing_worker_with_laptop_skillsgapU.S. industrial output increased for a fifth straight month, as manufacturing gains offset losses in mining, according to a new report released  by the Federal Reserve.

The Federal Reserve’s release on U.S. industrial production and capacity utilization showed industrial output rose 0.1 percent in October, continuing a steady rise in the index since June. Overall, the Fed’s index has surged 4% compared to this time last year.

Manufacturing leads nation’s industrial output gains

Manufacturing output outpaced overall gains, rising 0.3% in October, while mining output dropped 0.3%. A decline in auto production hampered overall manufacturing gains, according to the report. Manufacturing output, excluding motor vehicle production, edged up a half percent.

Mining output has slipped the past few months after hitting a record high in August, mostly due to oil and gas production, according to the Fed.

Manufacturing capacity utilization edges up

Manufacturing capacity utilization, which measures the extent to which industrial firms make use of their productive capacity, increased 0.1% in October to 76.2%, while mining fell 0.8% to 92.7%. The year-over-year reading shows manufacturing capacity utilization has grown 1.3%, while mining has shot up 5.4%.

Industrial output gains by industry

Durable goods industries posting the strongest gains in October included primary metals (+3%); nonmetallic mineral products (+1.9%); aerospace & miscellaneous transportation equipment (+1.7%) and furniture & related products (+1.6%).

Motor vehicle production, which accounts for the largest share of U.S. durable goods production dropped 2.1% last month, though overall the industry has grown 2.1% year-over-year.

Production of non-durable goods inched up 0.2% in the past month, with paper products and textiles posting the largest gains, each up 0.9%. These gains were offset by losses in apparel & leather (-1.9%); printing & support (-1.2%) and petroleum & coal products (-1.1%).

Production gains reflected by uptick in durable goods orders100000303tesla

The Fed’s industrial output report coincides with a rise in September’s durable goods orders as reported by the U.S. Department of Commerce. That report found orders for manufactured durable goods grew in September for a third straight month – though at a slower pace than reported in August.

The Commerce Department reported that new orders increased 0.8% in September to $262.1 billion, following a surge in August of 4.6%. Transportation equipment led that increase, up 1.9% to $97.4 billion.

Shipments of manufactured goods also ratcheted up for a third straight month, rising at a faster pace in September, up 1.3%, compared to August’s 0.9% increase. Transportation equipment also led that increase, up 3.3%.

Other items covered by the Commerce Department’s report included unfilled orders, which edged up 0.8% to $1.1 billion worth of unfilled orders, while inventories of manufactured durable goods increased 0.7% in September to $410.7 billion.

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 25th straight month of growth – though the pace of growth has cooled slightly over the past two months.

Recent data collected by IndustryNet also points to industrial growth in October, with precision machining posting robust sales gains and a number of new U.S. manufacturing plants and expansions announced. 

 

 

 

 

 

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