Capacity Utilization Hits 2-Year-Low As Downard-Revisions Flatter December Industrial Production

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by Tyler Durden
Wednesday, Jan 17, 2024 - 02:30 PM

US Industrial Production was expected to decline modestly (-0.1% MoM) in December but instead surprised to the upside with a small 0.1% MoM rise, flattered by a downwardly revised -0.03% change in November (from  a +0.2% rise initial print) which helped push industrial production up around 1% YoY...

Source: Bloomberg

Manufacturing production rose 0.1% MoM in December (better than the unch expected) but again that was flattered by a downward revision in November. This pushed manufacturing up 1.2% on a year-over-year basis but overall, manufacturing output declined 2.2% (annual rate) in the fourth quarter.

Source: Bloomberg

Excluding motor vehicles and parts, factory output declined 0.1 percent in December and 0.3 percent (annual rate) in the fourth quarter.

In December, the index for durable manufacturing fell 0.4 percent, while the index for nondurable manufacturing rose 0.6 percent. The index for other manufacturing (publishing and logging) declined 1.1 percent.

Within durables, declines of more than 1 percent were recorded by wood products, by fabricated metal products, by machinery, and by electrical equipment, appliances, and components. Motor vehicles and parts as well as furniture and related products posted gains of more than 1 percent.

Auto production has almost recovered to its pre-strike levels...

Within nondurables, most industries registered gains with the exception of paper and of printing and support.

In December, mining output increased 0.9 percent, and the output of utilities decreased 1.0 percent. For the fourth quarter, the output of mines fell 3.4 percent (annual rate) after increasing in the previous two quarters. The index for utilities dropped 8.2 percent (annual rate) in the fourth quarter after jumping over 15 percent in the previous quarter.

Capacity Utilization dropped to its lowest since Sept 2021 at 78.6%...

Source: Bloomberg

Q4 closed with the lowest quarter-end industrial production since Q1 2022 and biggest QoQ decline since the COVID lockdowns...

Source: Bloomberg

Hardly the soft-landing everyone hoping for...