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Industrial Output Rises by Most Since November 2012
Industrial production in the U.S. rose in September by the most since November 2012, driven by a surge at utilities and a rebound in manufacturing.
The 1% advance in output at factories, mines and utilities exceeded the highest forecast in a Bloomberg News survey and followed a 0.2% drop the prior month, Federal Reserve figures showed in Washington. Utility production was the strongest since May 2012.
Corporate orders for equipment and sustained consumer spending on the heels of job gains, cheaper borrowing costs and lower gas prices kept factory floors busy last month. At the same time, a weakening in global markets threatens to limit the pace of production.
“The manufacturing sector is still growing,” Brett Ryan, U.S. economist at Deutsche Bank Securities Inc. said. “Order backlogs are high and they’ve been rising. That should support production over the next couple quarters.”
Manufacturing, which makes up 75% of total production, climbed 0.5% in September, erasing the previous month’s decline, the Fed’s report showed.
The median forecast in a Bloomberg survey of 80 economists called for a 0.4% rise in total production. Estimates ranged from gains of 0.1% to 0.8% after a previously reported 0.1% decline in August.
Capacity utilization, which measures the amount of a plant in use, rose to 79.3% in September from 78.7% the prior month.
Utility output surged 3.9% after rising 1.2% in July. Mining production, which includes oil drilling, increased 1.8%, the most since April.
Production of business equipment rose 0.3% after a 0.2% decline in August, the report showed. Output of computers and electronic products increased 0.8% after a 1% gain. Factories also churned out more appliances and furniture in September.
