US FACTORY production rose slightly in August as resilient business investment more than offset a pullback in the output of consumer goods, consistent with steady manufacturing activity.
The 0.1 per cent increase in manufacturing output last month followed an auto-fuelled 0.6 per cent July increase, Federal Reserve (Fed) data showed on Thursday (Sep 15). Including mining and utilities, total industrial production fell 0.2 per cent in August.
The median forecast in a Bloomberg survey of economists called for a 0.1 per cent decline in factory output and no change in total industrial production.
While domestic demand is generally holding up, manufacturers face a number of headwinds including a shift in consumer behaviour towards services and away from goods. That change in preferences caught some retailers flat-footed, leading to an inventory overhang and cancelled orders that are further weighing on production.
Foreign demand is at risk of softening at well, as an energy crisis grips Europe, China's economy cools and a surge in the value of US dollar raises the costs of US goods for overseas customers.
A pair of regional Fed bank surveys on Thursday showed mixed results. A gauge of manufacturing in New York state snapped back in September on firmer orders and shipments after plunging in the prior month. At the same time, the Philadelphia Fed's gauge contracted for the third time in 4 months.
Among industry groups, factory production for machinery, aerospace equipment, and computers and electronic products increased. Meantime, motor vehicles output fell after a robust advance in the prior month. Consumer goods production also fell, reflecting a drop in food, clothing and energy.
Excluding autos, factory production increased 0.2 per cent. The Fed's report also showed capacity utilisation at factories held at 79.6 per cent.
Outside of manufacturing, utility output fell 2.3 per cent on a decline in electricity. Mining was unchanged after 5 straight months of gains. Oil and gas well drilling rose 2.7 per cent.
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