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Factory production in US rises for fourth time in five months

Wednesday, February 15, 2017 - 23:09

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US factory output increased for the fourth time in five months amid gains in machinery and chemicals, extending a gradual recovery in manufacturing.

[WASHINGTON] US factory output increased for the fourth time in five months amid gains in machinery and chemicals, extending a gradual recovery in manufacturing.

Production at factories, which make up about 80 per cent of all output, increased 0.2 per cent in January from the previous month, a Federal Reserve report showed Wednesday.

That matched the median forecast in a Bloomberg survey. Total industrial output, which includes mining and utilities, fell 0.3 per cent as warm weather reduced demand for heating.

Healthy consumer spending and a recovery in the oil sector have supported recent gains in manufacturing, with a key gauge of industry rising last month to the highest since November 2014. At the same time, modest overseas demand, a strong US dollar and soft investment in equipment from domestic firms have made for slow progress.

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Estimates in the Bloomberg survey for manufacturing output, which accounts for about 12 per cent of the economy, ranged from a decline of 0.1 per cent to an increase of 0.6 per cent. The previous month's reading of a 0.2 per cent gain was unrevised.

For total industrial production, the Bloomberg survey showed estimates ranging from a 0.6 per cent drop to a rise of 0.4 per cent, with a median projection for no change.

Capacity utilisation, which measures the amount of a plant that is in use, declined to 75.3 per cent in January from a revised 75.6 per cent the prior month.

Utility output dropped 5.7 pe rcent after December's 5.1 per cent gain. Last month was the 18th-warmest January in the last 123 years, according to the National Oceanic and Atmospheric Administration.

Mining production, including oil drilling, expanded 2.8 per cent in January after a 1.4 per cent drop. Drilling of oil and gas wells jumped 8.5 per cent.

US rig counts increased to 741 in the week ended Feb 10, the highest in more than a year, helped by increasing energy prices, Baker Hughes Inc data show.

Consumer durable-goods output fell 0.9 per cent last month on a 2.8 per cent drop in automotive production. Business equipment production ticked up 0.1 per cent following a 0.8 per cent increase.

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