Industrial Production Flat in June

Wells Fargo Research Team Wells Fargo

Industrial production was flat during June, as a drop in utilities output outweighed gains in mining and manufacturing. Despite the second consecutive monthly gain, manufacturing output remains fairly weak.

Drop in Utilities Weighs on Overall Production

Overall industrial production was essentially unchanged in June. However, the underlying details paint a slightly better picture, as solid gains in manufacturing and mining were not enough to offset a decline in utilities.
Mining rose 0.2%, bolstered by oil and gas extraction. A steadily declining rig count will limit potential future gains. Utilities gave back all of May’s weather-induced bump and dropped 3.6%.

Manufacturing Boosted by Autos

Manufacturing rose 0.4%, the second straight monthly gain. June’s gain was helped by a 2.9% upturn in motor vehicles production. Excluding autos, manufacturing rose just 0.2%, a result more in line with the underlying slowing trend in overall manufacturing production, which declined 2.2% in the second quarter. Slowing global growth, trade uncertainty and a stronger dollar will likely continue to weigh heavily on the factory sector

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Wells Fargo Research Team

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