A modest rise in June industrial output

Summary

A better-than-expected print for June industrial production follows upward revisions to May data. It is not quite a manufacturing renaissance, but it is a modestly brighter assessment than would have been expected against a backdrop of gloomy survey data.

Modest rise thanks in part to a bounce in utilities

Overall industrial production rose 0.3% in June on the heels of an upward revision that lifted May's 0.2% headline decline to an unchanged reading for the month. Relative to the consensus expectation for a scant 0.1% increase, today's print is a modestly encouraging development for a sector that has not felt the wind in its sails for some time.

An expected rebound in utilities output of 2.8% more than offsets a decline of 2.5% in the prior month. Still with just an 11% share of total output, it is not as though the gains in utilities provided a massive lift to the headline. Rather, the growth came from actual manufacturing. A closer look at the underlying details here reflects offsets across different industries, but on balance a less negative reading in the hard data than the contracting signals from various manufacturing surveys might otherwise suggest. The nearby chartsignals how the more recent 3-month annual rate is outperforming the year-over-year, which suggests an uptick in output, if only a mild one.

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