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Industrial Production Takes a Step Back in August

Sept. 16, 2014
Industrial production fell 0.1% in August while manufacturing output decreased 0.4%, the Federal Reserve reported today. The declines for the two indices were the first since January.

Industrial production fell 0.1% in August while manufacturing output decreased 0.4%, the Federal Reserve reported today. The declines for the two indices were the first since January.

The decline was primarily due to a 7.6% drop in motor vehicle and parts production in August. Excluding that, manufacturing output rose 0.1% for the month.

The central bank also revised down production figures for July, with overall industrial output down 0.2% and manufacturing lowered by 0.1%.

At 104.1% of its 2007 average, total industrial production in August was 4.1% above its August 2013 level. Manufacturing, at 100.2%, was 3.6% higher than the year-ago period.

US factory output edged back in August, primarily due to a drop in motor vehicle production. (Chart: Federal Reserve)

Capacity utilization for total industry fell in August to 78.8% from a revised 79.1% in July. Manufacturing utilization also fell, from 77.6% in July to 77.2% in August. However, compared to August 2013, overall utilization was up 1.0% and manufacturing utilization increased 1.1%. Manufacturing remained below its long-term capacity utilization of 78.7%.

The production of consumer goods decreased 0.8% in August after having risen a similar amount in July, the bank reported. The output of durable consumer goods declined 4.4% in August largely due to a drop of 7.0% in the production of automotive products. Appliances, furniture and carpeting, and miscellaneous goods also fell. However, the output of home electronics increased 2.4%.

Following four months of declines, the index for nondurable consumer goods gained 0.3%. The production of non-energy nondurables increased 0.5%, with gains in foods and tobacco and in chemical products. The output of consumer energy products fell 0.2%, wiping out the increase in July.

In August, business equipment production was flat. Increases in information processing and for industrial and other equipment offset a decrease in production of transit equipment.

The production of defense and space equipment declined 0.7% in August for its first decrease since January. Still, the index was 0.8% above its level of a year earlier.

The production of construction supplies edged up 0.1% in August following an increase of 1.3% in July, the Federal Reserve reported. Despite some recovery in the construction market, the output of construction supplies in August was still approximately 15% below its pre-recession peak.

Mining output in August rose 0.5% while the output of utilities increased 1.0%.

About the Author

Steve Minter | Steve Minter, Executive Editor

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An award-winning editor, Executive Editor Steve Minter covers leadership, global economic and trade issues and energy, tackling subject matter ranging from CEO profiles and leadership theories to economic trends and energy policy. As well, he supervises content development for editorial products including the magazine,, research and information products, and conferences.

Before joining the IW staff, Steve was publisher and editorial director of Penton Media’s EHS Today, where he was instrumental in the development of the Champions of Safety and America’s Safest Companies recognition programs.

Steve received his B.A. in English from Oberlin College. He is married and has two adult children.

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