Industrial Production Unchanged in January, Capacity Utilization Down

Industrial production in the United States in January was 95.9 percent of its 2007 average, that year being the start of the series. This was the same as in December 2011, but it is 3.4 percent higher than one year ago. The index is broken down into three major industry groups: manufacturing, mining, and utilities, and in January these components presented a mixed bag of statistics. The figures come from a Federal Reserve Report released on Wednesday.

Manufacturing itself was up 0.7 percent, led by a jump for motor vehicles and parts of 6.8 percent, with the index for other manufacturing industries increasing by 0.3 percent. Also in January utilities output fell 2.5 percent, as warmer than average temperatures held the demand for heating down. During the same period, output of mines fell 1.8 percent. Revised figures for December were included in the Report as well, showing that total industrial production rose 1.0 percent, higher than the 0.4 percent which was originally reported.

More specifically, the production of consumer goods moved down 0.1 percent in January. Consumer durables, led by automotive products, home electronics, appliances, furniture and carpeting, increased 3.8 percent, but consumer nondurables fell 1.2 percent. In the latter group declines in food and tobacco offset gains in clothing, chemical and paper products. The output of consumer energy fell 4.0 percent during the same period.

The production of business equipment increased 1.8 percent in January in all its major component areas; this is 11 percent above its level one year earlier. Transit equipment rose 2.5 percent, and information processing equipment advanced 1.8 percent.

Capacity utilization fell slightly in January, from 78.6 to 78.5 percent, but the rate is up 1.2 percent from a year before. The low was in 2009 with 67.3 percent of production capacity in use, and the average between 1972 and 2011 is 80.3 percent. Grouped by stage of process, utilization for crude materials fell 1.0 percent to 89.9 percent; primary and semi finished stages decreased 0.4 points to 74.9 percent, and at the finished stage utilization rose 0.8 points to 78.1 percent.

Finally, total industrial capacity is expected to increase by 1.0 percent during 2012, compared to 1.1 percent in 2011. Manufacturing and mining component increases are both projected near this percentage, but capacity in utilities is expected to grow by 2.4 percent, which is 0.4 percent faster than last year.

To contact the reporter on this story: Mark Lawson at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com