The Federal Reserve reported September 2020 industrial production slipped 0.6% in September.
While not a precipitous drop, the September drop broke a streak of four straight months of gains.
Sign up today for Gunpowder, MetalMiner’s free, biweekly e-newsletter featuring news, analysis and more.
September 2020 industrial production still below pre-pandemic levels
According to the Fed, industrial production has to date recovered more than half of its decline from February to April.
Nonetheless, the September industrial production level remained down 7.1% from its pre-pandemic level in February.
“Manufacturing output decreased 0.3 percent in September and was 6.4 percent below February’s level,” the Fed reported. “The output of utilities dropped 5.6 percent, as demand for air conditioning fell by more than usual in September. Mining production increased 1.7 percent in September; even so, it was 14.8 percent below a year earlier.”
Capacity utilization drops
Meanwhile, the industrial sector’s capacity utilization fell by 0.5 percentage point in September, down to 71.5%.
The rate marked an 8.3-percentage-point decline from the long-run average (i.e., 1972-2019).
However, the September rate is up 7.3 percentage points from its low in April, the Fed reported.
The numbers by market group
Broken down by market group, the index for consumer goods fell 1.6%.
Within consumer goods, the indexes for automotive products and consumer energy products fell by more than 4%.
Business equipment production fell 1.2%, as an increase for transit equipment partly offset a decrease for information processing equipment, the Fed added.
Meanwhile, defense and space equipment production rose 2.1%.
Manufacturing output down
In addition, September 2020 manufacturing output fell 0.3% in September.
“The index for durable manufacturing fell 0.5 percent in September,” the Fed continued. “Increases for primary metals, for fabricated metal products, and for aerospace and miscellaneous transportation equipment were more than outweighed by decreases elsewhere; most notably, the indexes for computer and electronic products and for motor vehicles and parts fell more than 2 1/2 percent.”
The manufacturing sector’s capacity utilization rate reached 70.5% in September. The September rate marked a 10.4-percentage-point increase from April.
However, the September rate remained down 7.7 percentage points from the long-run average.
The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.