iStock/Getty Images
Car Doors In Factory Assembly Line Istock Getty Images 5e21ceca02771

December Gain in US Manufacturing Output Wraps Up Weak Year

Jan. 17, 2020
Federal Reserve data for December shows an increase of 0.2% in manufacturing output in December.

U.S. factory production unexpectedly increased in December, a bright spot in an otherwise weak year for manufacturing.

The 0.2% increase in manufacturing output followed a revised 1% gain in November, Federal Reserve data showed Friday. The median forecast in a Bloomberg survey of economists called for a 0.1% decline. For all of 2019, factory production fell 0.2%, the first decrease in three years.December factory output was held back by motor vehicle manufacturing, which fell 4.6%. Excluding cars, factory production rose 0.5%, the most in four months. Total industrial production, which includes mines and utilities, declined 0.3% as warmer weather reduced demand for heating.

Key Insights

  • The December increase signals a pause in the manufacturing slump that began in 2019. While the U.S. and China signed the Phase One trade deal this week, factories are still contending with a business-investment slowdown and weak demand from foreign customers.
  • Other manufacturing gauges continue to show weakness, including the Institute for Supply Management's measure which fell in December to the lowest level since 2009.
  • Friday’s report showed gains in the output of construction materials, which jumped 1.6% in December. Production of primary metals, computers and electrical equipment also increased last month.

Get More

  • Capacity utilization, measuring the amount of a plant that is in use, fell to 77%, from 77.4%. Manufacturing capacity edged up to 75.2% from 75.1%.
  • Utility output dropped 5.6% after rising 1% the prior month. Mining production increased 1.3%, reflecting a pickup in oil and gas well drilling as prices firmed.
  • The Fed's monthly data are volatile and often get revised. Manufacturing, which makes up about three-fourths of total industrial production, accounts for about 11% of the U.S. economy.

By Katia Dmitrieva

About the Author

Bloomberg

Licensed content from Bloomberg, copyright 2016.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!