U.S. Industrial Production Edges Higher in February

Total industrial production improved 0.1% (-0.2% y/y) during February after falling 0.5% in January, revised from a 0.1% decline reported last month. A 0.3% December shortfall was revised from no change. The Action Economics Forecast Survey expected production to be stable m/m in February. Production has fallen 1.2% from its high in September 2022.

Manufacturing production rose 0.8% (-0.7% y/y) last month, following a 1.1% January decline and stability in December. Mining output rebounded 2.2% (1.4% y/y) after a 2.9% January drop. Utilities production plummeted 7.5% in February (+0.8% y/y) and reversed all of the prior month’s 7.4% gain.

In the manufacturing sector, production of durable goods rose 1.0% (0.5% y/y) in February after a 1.1% January decline. Motor vehicle & parts production strengthened 1.8% last month (3.5% y/y) while machinery output surged 1.7% (-5.1% y/y). Electrical equipment & appliance output gained 0.8% but was unchanged y/y. Primary metals production eased 0.2% (-1.3% y/y) and computer & electronic product production rose 0.7% (7.9% y/y). In the nondurable goods sector, factory output rose 0.7% last month (-1.3% y/y) after falling 1.1% in January. Chemical production strengthened 1.6% (-0.5% y/y) and printing production improved 1.5% (-3.3% y/y). Paper output rose 1.1% (-0.2% y/y) and textile output increased 0.8% (-4.7% y/y). Petroleum & coal product output declined 0.4% (+1.9% y/y) and apparel production eased 0.3% (-13.2% y/y), off for the fourth straight month.

The major market groups posted mixed results in February. Consumer goods output fell 1.4% (-1.5% y/y) as a 2.0% decline (-2.1% y/y) in nondurable goods production overshadowed a 0.9% increase (0.8% y/y) in durable goods output. Business equipment production rose 1.7% last month (-0.2% y/y) while construction supplies output rose 1.9% (-2.2% y/y). Materials output increased 0.5% (0.6% y/y) in February.

In special aggregates, output of selected high-tech industries rose 0.3% (18.6 y/y) following a 0.4% gain in January. Manufacturing output excluding selected high-tech production rose 0.9% (-1.1% y/y) after falling 1.1% in January. Manufacturing output excluding selected high-tech industries and motor vehicle production rose 0.8% (-1.4% y/y) in February after falling 0.9% in January.

Total capacity utilization was unchanged m/m at 78.3% in February, its lowest level since September 2021. A 78.5% utilization rate had been expected. Capacity utilization for manufacturing improved to 77.0% in February from 76.4% in January. The capacity utilization rate for mining surged to 93.8% from 91.7. The operating rate for utilities declined to 67.8% from 73.5% in January.

Industrial production and capacity data are located in Haver’s USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.