In October, industrial production was unchanged, following a decline of 0.2 percent in September. As was the case in September, October’s weakness was primarily due to a large drop off in utilities output, which fell 3.4 percent over the month. In contrast, manufacturing output rose 0.5 percent, the strongest rise since July. The gain was led by auto production, which increased by 1.6 percent over the month. However, even without auto production, output rose 0.5 percent. The month’s solid growth in output is encouraging after two months of soft numbers. It suggests that manufacturing sector activity growth is no longer decelerating.
The capacity utilization rate remained flat at 74.8 percent. Though this is off of its lows of the cycle, it is still considerably low. A large amount of excess capacity continues to exist. Until this rate comes up further, significant amount of industrial sector investments will not be required.
At the economics outlook conference one of the representatives talked about the impacts manufacturing is having on our recovery. For so long many thought our poor manufacturing numbers were harming our economy but in fact the manufacturing sector may be what is helping bring us out of a recession, at least in Ohio. I think this article helps confirm this argument from the conference.
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