Rebounding from a substantial decline in August’s motor vehicle production, industrial production increased 1.0 percent in September. Growth concerns abroad, however, may limit IP growth in the coming months.
Broad Production Improvement
- While weakness in motor vehicle production continued from August’s 7.0 percent drop, industrial production increased 1.0 percent in September. Excluding motor vehicles and parts, industrial production was up a solid 0.6 percent.
- All three major industry groups increased in September with manufacturing up 0.5 percent, utilities up 3.9 percent and mining output up 1.8 percent.
Darkening Clouds Ahead?
- While business sentiment surveys remain solid at the start of Q4, firms have likely not reacted to the recent acceleration in dollar appreciation and slower global growth. As such, a moderation in the pace of industrial production growth is a possibility in the months ahead. That said, domestic demand remains firm, and we still expect industrial production will continue to be a positive contributor to overall GDP growth as we end the year.
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