US industrial production climbs for a second straight month

[WASHINGTON] US industrial production rose for a second month in July, driven by continued strength in manufacturing tied to business investment.

The 0.2 per cent advance in production at factories, mines and utilities followed an upwardly revised 0.3 per cent rise a month earlier, Federal Reserve data showed Tuesday (Aug 18).

Factory output, which accounts for three-fourths of total industrial production, advanced 0.2 per cent following an upwardly revised 0.3 per cent gain a month earlier and despite a drop in auto manufacturing.

Output at utilities increased in July by the most in three months, while mining also rose.

The report adds to signs of momentum in manufacturing, with resilient consumer demand and solid capital spending – especially that related to the artificial-intelligence buildout. In the second quarter, manufacturing rose at the fastest annual rate since 2021, the Fed’s data showed. The sector has showed strength despite rising input costs and supply challenges related to the Iran war.

At the same time, rising input costs and supply challenges related to the Iran war remain challenges for factories.

The Fed’s report showed a 0.8 per cent increase in output of business equipment and a 1.8 per cent jump in production of defence and space equipment. Production of construction supplies rose the most since January. By industry group, the output of computer and electronic products rose 1.9 per cent. 

At the same time, auto production fell 2.1 per cent, the most since October. Excluding motor vehicles, manufacturing output increased 0.4 per cent.

Capacity utilisation at factories, a measure of potential output being used, ticked up to 76 per cent. The overall industrial utilisation rate also rose. BLOOMBERG