The index of industrial production edged down 0.1 percent in October, and the index for manufacturing output increased 0.2 percent for the second straight month. The index for mining declined 0.9 percent and the output of utilities moved down 0.7 percent.
“Despite the relatively slow growth in October manufacturing production, we are optimistic about the state of the sector,” said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation. “Sentiment indicators, like the Purchasing Managers Index, implied stronger production than was reported in the industrial production release and the employment report showed a robust 15,000-worker gain in October manufacturing employment. We believe manufacturing production will continue to accelerate and grow faster than the general economy. Manufacturing production will be up 3.3 percent in 2014 and the MAPI Foundation predicts growth of 3.5 percent in 2015 and 3.9 percent in 2016.”
At 104.9 percent of its 2007 average,total industrial production in October was 4 percent above its level of a year earlier. Capacity utilization for the industrial sector decreased 0.3 percentage points in October to 78.9 percent, a rate that is 1.2 percentage points below its long-run (1972–2013) average.
In October, declines in the indexes for consumer goods and materials were the largest contributors to the decrease in total industrial production; the indexes for defense and space equipment and for business supplies also recorded declines. Gains in the production of business equipment and construction supplies offset some of the losses.
The output of consumer goods moved down 0.2 percent, with decreases of more than 1 percent for automotive products and paper products and with a smaller decline for energy goods. The output of materials decreased 0.2 percent, as a decline in the production of energy materials was only partially offset by small gains in the indexes for durable and nondurable materials. By contrast, the production of business equipment moved up 0.6 percent, with increases in the indexes for information processing equipment and for industrial and other equipment; the output of business equipment was 4.6 percent above its level of a year earlier.
Manufacturing output rose 0.2 percent in October, as the production of nondurable goods rose 0.3 percent and the production of durable goods edged up 0.1 percent. Among durable goods industries, machinery posted the largest increase, 1.3 percent, while wood products, computers and electronic products, and furniture and related products all recorded gains of more than 1/2 percent. These gains were partially offset by declines of more than 1 percent in the indexes for nonmetallic mineral products and for motor vehicles and parts. The decline in motor vehicles and parts resulted from a decrease in vehicle assemblies, which fell 400,000 units to an annual rate of 11.1 million.
Production increased for most nondurable goods industries, with the largest advances recorded by chemicals and by plastics and rubber products; only the paper industry registered a decline. The production of other manufacturing (non-NAICS) industries fell 1.1 percent.
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