March 18, 2025
Industrial production for February climbed 0.7% after having risen 0.3% in January and 1.1% in December. the February increase was attributable in large part to a dramatic 8.5% increase in automobile output.
Breaking industrial production down into its three basic categories — manufacturing, mining, and utilities. Manufacturing production rose 0.9% in February after having risen 0.1% in January. In the past year manufacturing output has risen 0.7%.
Motor vehicle sector production surged 8.5% in February after having fallen 5.3% in the previous month. In the past year it has declined 4.8%. This category is very volatile on a month-to-month basis.
Excluding the motor vehicle sector, manufacturing output rose 0.3% in February after having risen 0.5% in January and 0.7% in December. This is the third consecutive increase in this series. In the past year it has risen 1.1%. The imposition of tariffs is providing a lift to the domestic manufacturing sector.
High tech production rose1.4% in January after spiking by 3.5% in January and climbing 1.9% in December. High tech production has risen 12.6% in the past year. We would suggest that if firms are unable to find an adequate supply of workers, they will turn to technology in an effort to boost production and satisfy the demand for their products. At the same time firms are all experimenting with AI in an effort to figure out how it might help them boost productivity. Thus, we expect high tech production to continue to climb rapidly in the months ahead.
Mining (14%) output jumped 2.8% in February after declining 3.2% in January. Mining has been unchanged in the past year.
Utilities output fell 2.5% in February after having surged by 6.1% in January as bitter cold weather gripped much of the country. Over the past year utility output has risen 8.7%. This component is extremely volatile from month-to-month as the weather fluctuates.
Capacity utilization in the manufacturing sector rose 0.6% in February to 77.0% after having been unchanged in January. The utilization rate is slightly below the 77.4% level that is generally regarded as effective full capacity utilization.
Stephen Slifer
NumberNomics
Charleston, SC
Follow Me