Industrial production skidded last month
Manufacturing and production lost ground in September.聽
October 17, 2024
September industrial production fell 0.3%, weaker than the consensus expectation of down 0.2%. A strike at a major producer of civilian aircraft, as noted by the Federal Reserve, detracted 0.3% from industrial output while the effects of two hurricanes subtracted 0.3%. Meanwhile, August production was revised sharply lower to a positive 0.3% from the previously reported gain of 0.8%.
Manufacturing output fell 0.4%, driven lower by output of aerospace and miscellaneous transportation equipment, which plunged 8.3% due to strike action by aircraft workers. This was the largest drop in aerospace output since COVID, when production fell 22% in April 2020. A 1.5% drop in motor vehicles and parts production and a 0.1% decline in machinery production contributed to the weakness in manufacturing output.
Mining output fell 0.6% as oil and gas extraction facilities were held up by the effects of two hurricanes 鈥� Francine and Helene. Business equipment output fell 3.5% with information processing production down 0.3%.
The only area of discernible increase in September was utility output, up 0.7%. Contributions came from natural gas production, up 2.1%, and electric output, up 0.5%.
We expect the outlook for manufacturing activity to brighten in 2025 on the back of additional interest rate reductions by the Federal Reserve.
Ken Kim, 乐鱼（Leyu）体育官网 Senior Economist
Bottom Line:
The continuation of the aircraft workers' strike and the impact of Hurricane Milton are likely to show up in upcoming data. This suggests the soft patch for industrial activity will continue. The weaker readings in recent purchasing managers' surveys for the manufacturing sector and tepid capital spending due to election uncertainty suggest the same weak trajectory for the industrial sector over the next few months. We expect the outlook for manufacturing activity to brighten in 2025 on the back of additional interest rate reductions by the Federal Reserve.
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