Industrial Production: Solid Trends in Autos, Tech and Non-Tech Manufacturing
December 15, 2017
Bottom Line: Industrial activity rose a touch less than expected, but there were positive revisions to October data that more than offset the miss. Looking past the volatile mining and utilities sectors, there has been a moderate acceleration in manufacturing across sectors. While auto production has been strong (due to stronger sales to hurricane replacement buyers), both tech and non-tech sectors excluding autos have seen accelerating growth. Industrial production in October and November is 5.4% above its Q3 average, sharply stronger than its -0.9% pace from Q2 to Q3.
Industrial Production ROSE by 0.24% in November, compared with market expectations for an increase of 0.3%. Moreover, the prior month was revised from 0.9% up to 1.2%. Output is now 3.4% ABOVE its year ago level.
- Mining Output ROSE by 2.0%, and is now 9.4% ABOVE its year ago level.
- Utility Generation FELL by 1.9% and is now 2.3% ABOVE its year ago level.
- Manufacturing Output ROSE by 0.1% but is now only 2.3% ABOVE its year ago level.
- Output in high-tech industries rose by 0.3%. Meanwhile, output in the motor vehicle industry rose by 0.1%.
Capacity Utilization ROSE by 0.1 points to 77.1%, compared with market expectations for a higher increase to 77.2%. Moreover, the prior month was revised from 77.0% to 77.0%. Capacity utilization rate is now 1.6 percentage points above its year ago level and 2.9 percentage points below its long-run (1972–2015) average.
Article by Contingent Macro Advisors