Industrial production decreased 0.5% in October after having increased 0.2% in September. At 114% of its 2002 average, total industrial production in October was 1.8% above its year-earlier level.
Output in the manufacturing sector fell 0.4% in October. The output of utilities dropped 1.6%, primarily because of a decline in gas utilities.
"The broad-based decline in manufacturing output during the month of October indicates that the growing risks to both U.S. and global growth are materially impacting U.S. factory performance," said Cliff Waldman, economist for the Manufacturers Alliance/MAPI. "While the production of both consumer and capital goods declined, the sharp 0.7% fall in the output of consumer goods indicates that weakening and uncertain domestic demand is overwhelming positive export performance to create an increasingly bleak near-term growth prospect for the U.S. manufacturing sector, as evidenced by the weak output performance of many durable and nondurable industry groups."
The deepening housing and credit crises along with the recent surge in the price of oil has created the risk of an actual downturn in manufacturing, although still strong export performance should allow the factory sector to escape the current period of uncertainty without an especially deep decline," he added.
The production of durable goods moved down 0.2%. Decreases were recorded in wood products; nonmetallic mineral products; fabricated metal products; machinery; electrical equipment, appliances, and components; motor vehicles and parts; and miscellaneous products. Increases occurred in primary metals, computer and electronic products and aerospace and miscellaneous transportation equipment.
The production of nondurable goods decreased 0.4% after having risen the same amount in September. Significant declines were registered for food, beverage, and tobacco products; apparel and leather; printing and support; and chemicals.
Capacity utilization for total industry declined to 81.7%, a rate equal to its year-earlier level but 0.7 percentage point above its 1972-2006 average.
