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Industrial Production: Trend Still Positive But Autos Concerning

June 15, 2017
Bottom Line: Industrial activity was flat in May after April's solid gains were revised modestly higher, while March was revised lower. Overall the trends still remain mildly positive amid weather-related volatility in the utilities and mining sectors . The six-month averages for the manufacturing sector as a whole still suggest some acceleration relative to the 12-month and 2016 pace. However, the last 3 months have seen weakness in the auto sector that offers some reason for concern.

Industrial Production was UNCHANGED in May, compared with market expectations for an increase of 0.2%. The prior month was revised from 1.0% up to 1.1%. Output is now 2.2% ABOVE its year ago level.

In May, Mining Output ROSE by 1.6%, and is now 8.3% ABOVE its year ago level. Utility Generation ROSE by 0.4% and is now 0.1% ABOVE its year ago level.

Manufacturing Output FELL by 0.4% and is now only 1.4% ABOVE its year ago level. Output in high-tech industries was unchanged. Meanwhile, output in the motor vehicle industry fell by 2.0%. Excluding both the high-tech and motor vehicles industries, industrial output decreased by 0.3%.

Capacity Utilization FELL by 0.1 points to 76.6%, compared with market expectations for a higher increase to 76.8%. Moreover, the prior month was revised from 76.7% to 76.7%. Capacity utilization rate is now 1.0 percentage points above its year ago level and 3.4 percentage points below its long-run (1972–2015) average.