February Industrial Production
Updated 15-Mar-10 10:00 ET
Highlights
- Industrial production increased 0.1% in February after growing 0.9% in January.
- The consensus estimate called for no gain.
- Capacity utilization rose from 72.5% to 72.7%.
Key Factors
- However, the details of the report do not showcase sustainable economic growth.
- Mining production rose 2.0% in February. Typically mining production moves in clear cycles and gains are reversed the next month.
- Without those gains, total industrial production would have declined 0.1%.
- Manufacturing production fell 0.2% as the motor vehicle industry gave back all of its January gains. The manufacturing production number would have been much worse if not for increased demand for gasoline. Petroleum processing production rose 2.2% after four months of declines.
- Motor vehicle production fell 4.4% as assemblies declined from 7.85 mln vehicles in January to 7.29 mln in February. They are slightly above December’s 7.20 mln level.
- Like the production data, all of the gains in capacity utilization were from the mining sector. Manufacturing utilization decreased from 69.1% to 69.0%.
Big Picture
- Production held up surprisingly well through most of 2008 due in part to strong exports. Exports grew at a 7.0% annual rate in 2005, 9.1% in 2006, 8.4% in 2007, and at an annual average rate of 7.8% through the first three quarters of 2008. Then, the bottom fell out in the fourth quarter as the financial crisis spilled over to the real economy at home and abroad, severly impacting global trade and end demand that led to declining levels of industrial production and capacity utilization. The near-term trend is expected to improve as financial markets, and global economies, have stabilized.
| Category |
FEB |
JAN |
DEC |
NOV |
OCT |
| Industrial Production |
|
|
|
|
|
| Total Index |
0.1% |
0.9% |
0.5% |
0.7% |
0.2% |
| Manufacturing |
-0.2% |
0.9% |
-0.2% |
1.0% |
-0.1% |
| Utilities |
0.5% |
0.6% |
5.5% |
-2.5% |
2.6% |
| Mining |
2.0% |
1.1% |
-0.4% |
2.2% |
0.0% |
| Capacity Utilization |
|
|
|
|
|
| Total Industry |
72.7% |
72.5% |
71.8% |
71.4% |
70.8% |
| Manufacturing |
69.0% |
69.1% |
68.4% |
68.4% |
67.6% |
