The 2020 Mid-Year Economic Update_long

Hurricane Ida Stunts Industrial Production in August

According to the Industrial Production and Capacity Utilization Report, industrial production increased just 0.4% during the month due to weather-related disruptions.
Industrial Production and Capacity Utilization Report

Total industrial production increased 0.4% in August as Hurricane Ida stymied growth by 0.3% due to forced plant closures and other disruptions, according to the Industrial Production and Capacity Utilization Report, released Wednesday by the Federal Reserve.

Overall manufacturing output rose 0.2%. Mining production fell 0.6%, reflecting hurricane-induced disruptions to oil and gas extraction in the Gulf of Mexico. The output of utilities increased 3.3%, as unseasonably warm temperatures boosted demand for air conditioning.

At 101.6% of its 2017 average, total industrial production in August was 5.9% above its year-earlier level and 0.3% above its pre-pandemic (February 2020) level. Capacity utilization for the industrial sector rose 0.2% in August to 76.4%, a rate that is 3.2%s below its long-run (1972–2020) average.

Almost all major market groups posted increases in August, buoyed by strength in the output of utilities. Among consumer goods, the production of durables and non-energy nondurables increased modestly, while the index for consumer energy products moved up 2.5%. The output of business equipment, construction supplies, and business supplies posted gains of around 1/2 to 3/4%. The production of materials edged up, as an increase for energy materials offset a decrease for non-energy materials.

Despite an estimated drag of 0.2% due to Hurricane Ida, manufacturing output increased 0.2% in August and was 1.0% above its pre-pandemic level. The production of durable goods edged up in August; among its industries, the largest gain was recorded by furniture and related products and the largest loss was recorded by electrical equipment, appliances, and components. The output of nondurable goods also edged up, with gains for food, beverage, and tobacco products, for paper, and for petroleum and coal products outweighing losses elsewhere, in particular for chemicals. The output of other manufacturing (publishing and logging) rose 2.4%.

Capacity utilization for manufacturing increased 0.1% in August to 76.7%. The operating rate for mining fell 0.4% to 76.1%, while the operating rate for utilities rose 2.3%s to 75.6%. The rates for all three sectors remained below their long-run averages.

Related Posts

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.