WASHINGTON (MarketWatch) — Industrial production rose slightly in September, led by an increase in construction supplies, but there’s little sign of a broad rebound in the offing for struggling manufacturers.
The Federal Reserve on Monday said industrial production grew 0.1% last month. In August, production had fallen a revised 0.5%.
American goods producers are still coping with stern headwinds, however. Industrial production fell again in the second quarter and output is down 1% in the past year.
A combination of slow global growth and a strong dollar has hurt the ability of U.S.-based companies to sell exports, while lower oil prices have forced domestic drillers and other energy producers to slash investment. Lower business profits are also weighing on spending and investment decisions of U.S. companies.
Although manufacturers are still expanding, they aren’t growing very fast and a big pickup soon is unlikely, especially as a contentious presidential election marked by anti-business sentiment in both parties rapidly approaches.
The sluggish pace of production is also evident in the extent to which manufacturers are operating plants.
So-called capacity utilization rose a tick to 75.4%, but it’s still well below its long-run average of 80%. In other words, plants are only running at three-quarters speed.
In September, manufacturing output grew 0.2%. Mining output also rose 0.4% after a large drop in August.
Yet those gains were offset by a 1% plunge in output from utilities, a volatile category influenced by weather patterns and the price of fuel. That was the second decline in a row, reflecting in part unseasonably warm weather.
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