July U.S. Industrial Production Fell Sharply on Weak Autos, Hurricane - Modern Distribution Management

July U.S. Industrial Production Fell Sharply on Weak Autos, Hurricane

July saw losses in manufacturing output, highlighting the impact Hurricane Beryl had in the industrial sector.
Factory constructions, industry technology, manufacturing iterio

U.S. industrial production decreased considerably in July following a consecutive gains in June and May.

The Federal Reserve’s latest Industrial Production and Capacity Utilization Report showed that production decreased 0.6% in July month-to-month, far more than market expectations of a 0.1% decline by economists surveyed by the Wall Street Journal.

At 102.9% of its 2017 average, total industrial production in July was down 0.2% year-over-year. Capacity utilization moved down to 77.8%, which was down 1.9 percentage points year-over-year.

Total July production was hampered by declines of 0.3% in manufacturing and 3.7% in utilities, while mining remained flat.


source: tradingeconomics.com

Market Groups

Most major market groups saw losses in July. The index for consumer goods decreased by 1% month-to-month, driven by a 7% drop in automotive products. The index for materials saw a decline of 0.7%, with losses in both its energy and its non-energy components.

Defense and space equipment showed positive growth with a 0.5% increase. However, business equipment and construction supplies declined 0.2% and 0.3%, respectively.

Industry Groups

Manufacturing output dropped by 0.3% in July month-to-month and was 0.1% above its year-earlier level. Nondurable manufacturing saw a 0.4% monthly rise, while durable manufacturing fell 0.9%.

The Fed noted that factory shutdowns early in the month caused by Hurricane Beryl are estimated to have held down July manufacturing output by 0.3%.

Specific industries such as motor vehicles and parts (-7.8%) more than offset gains elsewhere, including computer and electronic products (1.5%), machinery (1.4%) and primary metals (1.3%). Mining output was flat in July, and utilities output dropped by 3.7%.

Capacity utilization for manufacturing decreased by 1.1 percentage points to 77.2%, reflecting the impact of Hurricane Beryl across various manufacturing segments.

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