U.S. Industrial Production Rises, Driven by Auto Manufacturing Rebound
Manufacturing Output Gains as Motor Vehicle Production Soars Post-Strike
Industrial production in the United States saw a modest increase of 0.2 percent in November, with a notable rise of 0.3 percent in manufacturing output, as reported by the Federal Reserve. A significant rebound in motor vehicle and parts production, which surged by 7.1 percent following the resolution of trade union strikes at major automakers, primarily contributed to this upswing.
The overall boost in manufacturing was, however, tempered by a 0.2 percent decline in production excluding motor vehicles and parts. Despite these gains, the output of utilities dipped by 0.4 percent, while mining output edged up by 0.3 percent. Compared to the same period last year, total industrial production was 0.4 percent lower, but capacity utilization in November experienced a slight increase, reaching 78.8 percent, which is still 0.9 percentage points below the long-term average from 1972 to 2022.
The output across various market groups presented a mixed picture. The automotive sector's resurgence led to a 7.5 percent hike in the index for automotive products, significantly impacting consumer durables, which grew by 3.5 percent. In contrast, the production of consumer nondurable goods fell by 0.8 percent. Business equipment output rose by 0.9 percent, primarily due to an increase in transit equipment, while defense and space equipment saw a 1.2 percent gain. The indexes for construction supplies and business supplies remained stable compared to October, and a general increase of 0.3 percent in materials output was buoyed by a 2.7 percent jump in the index for consumer parts.
Durable manufacturing increases
Delving into industry-specific details, November's manufacturing output, which was 0.8 percent lower than the previous year, showed a 1.2 percent increase in durable manufacturing and a 0.5 percent decline in nondurable manufacturing. Within durable manufacturing, alongside the significant recovery in motor vehicles and parts, there were increases in computer and electronic products, as well as aerospace and miscellaneous transportation equipment. On the downside, there were decreases in wood products and miscellaneous categories. Nondurable manufacturing's only increase was in printing and support, while other categories like textile and product mills, and apparel and leather, witnessed significant declines.
Mining output showed a positive trend with a 0.3 percent rise in November, standing 2.3 percent above its level a year ago. However, the utility sector's output decreased by 0.4 percent and was 1.0 percent lower than the previous year. Capacity utilization for manufacturing edged up to 77.2 percent in November, still below its long-run average, while mining's operating rate improved, surpassing its long-run average by 7.3 percentage points. In contrast, the operating rate for utilities declined, remaining well below its historical average.