Industrial Production: Increases Moderately

Bottom Line: Industrial activity increased in January after dropping moderately in December. January's monthly change was the largest since November 2014. Industrial production in January is 0.9% above its Q4 average. That said, despite this month’s increase, industrial output growth is still declining year-over-year. Industrial Production ROSE by 0.9% in January, compared with market expectations for an increase of 0.4%. Moreover, the prior month was revised from -0.4% down to -0.7%. Output is now 0.7% BELOW its year ago level. Year-over-year output had been on a slowing trend since December 2015 and has now started to decline in the last 3 months. In January, Mining Output was UNCHANGED and is now 9.8% BELOW its year ago level. Utility Generation ROSE by 5.4% but is still 2.8% BELOW its year ago level. Manufacturing Output ROSE by 0.5% and is now 1.2% ABOVE its year ago level. Output in high-tech industries rose by 0.6%. Meanwhile, output in the motor vehicle industry jumped by 2.8%. Excluding both the high-tech and motor vehicles industries, industrial output climbed by 0.3%. Capacity Utilization ROSE by 0.7 points to 77.1%, compared with market expectations for a smaller increase to 76.7%. Moreover, the prior month was revised from 76.5% down to 76.4%. Capacity utilization rate is now -1.6 percentage points below its year ago level and 2.9 percentage points below its long-run (1972–2015) average.