Industrial production rose 0.3% in July after an increase of 0.6% in June, according to a report released on Aug. 15 by the Federal Reserve. Manufacturing output in July moved up 0.6%.
"The 0.3% gain in July industrial production understates the strong 0.6% growth in manufacturing production during the month (electric utility production declined 2.6%)," said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI. "Moreover, the 0.6% gain in manufacturing in July added to a similar sized gain in June. Low inventory levels, strong export demand, and ongoing moderate economic growth at home have allowed the manufacturing sector to shake off the depressing effects of the housing downturn. The fact that both durable and nondurable manufacturing sectors posted solid growth over the last couple of months bodes well for a continued industrial expansion."
The production of durable goods rose 0.9% in July, and gains were widespread across components. The production of nondurable goods rose 0.3%, after a gain of 0.4% in June. Substantial advances in July occurred in paper, petroleum and coal products and chemicals. However, the output indexes for textile and product mills, apparel and leather products, and plastics and rubber products all declined according the report.
The index for industrial and other equipment rose 1%, as farm machinery bounced back from its drop in the previous month and other machinery categories also registered increases. The production of defense and space equipment rose 0.6%.
Mining output advanced 0.7%, but the output of utilities fell 2.1%.
Capacity utilization for total industry edged up to 81.9%, a rate 0.5 percentage point below the level in July 2006 but 0.9 percentage point above its 1972-2006 average.
Total industrial production in July was 1.4% above its year-earlier level.
