Industrial Production:  Slower in July

Bottom Line: Industrial activity increased modestly in July, slower than in June and below expectations. Over the 3-months ended in July, motor vehicles and parts manufacturing declined sharply. Against this, miniing and utility generation has been strong. The combined effect put total industrial production over the last 3 months in-line with the 12-month average, suggesting production is growing at around 2%, still modest but faster than the pace for all of 2016. Industrial Production ROSE by 0.19% in July, compared with market expectations for an increase of 0.3%. Output is now 2.2% ABOVE its year ago level.

• In July, Mining Output ROSE by 0.5%, and is now 10.2% ABOVE its year ago level.
• Utility Generation ROSE by 1.6% and is now 0.7% BELOW its year ago level.
• Manufacturing Output was UNCHANGED and is now only 1.3% ABOVE its year ago level.
• Output in high-tech industries fell by 0.1%.
• Meanwhile, output in the motor vehicle industry fell by 3.6%.

Excluding both the high-tech and motor vehicles industries, industrial output climbed by 0.3%. Capacity Utilization was UNCHANGED at 76.7%, in-line with market expectations for 76.7%. Moreover, the prior month was revised from 76.6% to 76.7%. Capacity utilization rate is now 0.8 percentage points above its year ago level and 3.3 percentage points below its long-run (1972–2016) average.