Posted August 16, 2011
Manufacturing output inches higher
Manufacturing output increased 0.6 percent in July following gains of 0.2 percent in both May and June.
The Fed said capacity utilization for manufacturing in July was 75.0 percent, a rate 10.6 percentage points above its trough in June 2009 but still 4.0 percentage points below its long-run average.
Industrial production advanced 0.9 percent for the month. Although the index was revised down in April, primarily as a result of a downward revision to the output of utilities, stronger manufacturing output led to upward revisions to production in both May and June.
"July's increase in the industrial production index was the largest increase since December 2010. For manufacturing, the increase was the largest since March 2011," said Don Norman, economist for the Manufacturers Alliance/MAPI. "The rise in manufacturing production was led by a 5.2 percent jump in motor vehicle production. This jump, in part, reflects the easing of supply chain problems associated with the earthquake and tsunami in Japan. Excluding the increase in motor vehicle production, manufacturing production increased by 0.3 percent. The increase in overall industrial production index also reflects a 2.8 percent increase in output by utilities in response to the heat wave impacting much of the country."
The production index for durable goods manufacturing rose 1.0 percent in July, its largest increase since jumping 1.7 percent in January. Among the major durable goods industries, the largest gain was posted in motor vehicles and parts; in addition, primary metals and aerospace and miscellaneous transportation equipment both rose more than 1.0 percent. The only decreases last month were posted by electrical equipment, appliances, and components and by miscellaneous manufacturing. The overall index for durable manufacturing was 6.6 percent above its year-earlier level.
