Friday, May 15, 2020

Industrial Production Decreased 11.2 Percent in April, Capacity utilization at Record Low

by Calculated Risk on 5/15/2020 09:23:00 AM

From the Fed: Industrial Production and Capacity Utilization

Total industrial production fell 11.2 percent in April for its largest monthly drop in the 101-year history of the index, as the COVID-19 (coronavirus disease 2019) pandemic led many factories to slow or suspend operations throughout the month. Manufacturing output dropped 13.7 percent, its largest decline on record, as all major industries posted decreases. The output of motor vehicles and parts fell more than 70 percent; production elsewhere in manufacturing dropped 10.3 percent. The indexes for utilities and mining decreased 0.9 percent and 6.1 percent, respectively. At 92.6 percent of its 2012 average, the level of total industrial production was 15.0 percent lower in April than it was a year earlier. Capacity utilization for the industrial sector decreased 8.3 percentage points to 64.9 percent in April, a rate that is 14.9 percentage points below its long-run (1972–2019) average and 1.8 percentage points below its all-time (since 1967) low set in 2009.
emphasis added
Capacity Utilization Click on graph for larger image.

This graph shows Capacity Utilization. This series is down 1.8 percentage points from the previous record low set in June 2009 (the series starts in 1967).

Capacity utilization at 64.9% is 14.9% below the average from 1972 to 2017.

Note: y-axis doesn't start at zero to better show the change.

Industrial ProductionThe second graph shows industrial production since 1967.

Industrial production decreased in April to  92.6. This is 6.3% above the Great Recession low.

The change in industrial production was at consensus expectations.