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Hurricane Ida Stunts Industrial Production in August

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Total industrial production increased 0.4% in August as Hurricane Ida stymied growth by 0.3% due to forced plant closures and other disruptions, according to the Industrial Production and Capacity Utilization Report, released Wednesday by the Federal Reserve.

Overall manufacturing output rose 0.2%. Mining production fell 0.6%, reflecting hurricane-induced disruptions to oil and gas extraction in the Gulf of Mexico. The output of utilities increased 3.3%, as unseasonably warm temperatures boosted demand for air conditioning.

At 101.6% of its 2017 average, total industrial production in August was 5.9% above its year-earlier level and 0.3% above its pre-pandemic (February 2020) level. Capacity utilization for the industrial sector rose 0.2% in August to 76.4%, a rate that is 3.2%s below its long-run (1972–2020) average.

Almost all major market groups posted increases in August, buoyed by strength in the output of utilities. Among consumer goods, the production of durables and non-energy nondurables increased modestly, while the index for consumer energy products moved up 2.5%. The output of business equipment, construction supplies, and business supplies posted gains of around 1/2 to 3/4%. The production of materials edged up, as an increase for energy materials offset a decrease for non-energy materials.

Despite an estimated drag of 0.2% due to Hurricane Ida, manufacturing output increased 0.2% in August and was 1.0% above its pre-pandemic level. The production of durable goods edged up in August; among its industries, the largest gain was recorded by furniture and related products and the largest loss was recorded by electrical equipment, appliances, and components. The output of nondurable goods also edged up, with gains for food, beverage, and tobacco products, for paper, and for petroleum and coal products outweighing losses elsewhere, in particular for chemicals. The output of other manufacturing (publishing and logging) rose 2.4%.

Capacity utilization for manufacturing increased 0.1% in August to 76.7%. The operating rate for mining fell 0.4% to 76.1%, while the operating rate for utilities rose 2.3%s to 75.6%. The rates for all three sectors remained below their long-run averages.

The post Hurricane Ida Stunts Industrial Production in August appeared first on Modern Distribution Management.

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