No Real Excitement in Industrial Production and Capacity Utilization

Industrial production fell by 0.2% in September. That was actually a tad better than the -0.3% listed as the consensus economist target on Bloomberg. It was also better than the prior month’s original estimate of -0.4%, but it was worse than its revised number of -0.1%.

Capacity utilization came in at 77.5% in September. Bloomberg’s consensus estimate was 77.4%, and the preliminary 77.6% capacity number from the prior month was revised to 77.8%. That is a slight adjustment up from the prior month and an even more slight surprise on the upside, but it was still a drop from August. All in all it seems decent for capacity but not enough to move the needle — and well under the 80% or more that would be needed to entice big companies to go build more plants and buy up massive amounts of new capital equipment.

Friday’s report showed that the manufacturing component here was only down by 0.1%, better than Bloomberg’s consensus of -0.2% for September. August’s report of -0.5% on a preliminary basis was revised to -0.4% as well.

Motor vehicle production was up by 0.2%, and business equipment production was down by 0.1% in September. The bright spot of the report was also in consumer goods with a 0.2% gain. Utilities production was up 1.3% in September and in August, but mining (including oil-related production) was down by 2% in September.

All in all, weak exports continue to plague industries in America, and a weak oil sector only means ever more weakness to be expected from the U.S. energy sector, which had been such a bright spot.

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