Weak Industrial Production Numbers Confirm Manufacturing Recession

Industrial Production fell 0.3% as expected, but revisions subtract another 0.1%. Weather was again a factor.

According to the Fed's Industrial Production and Capacity Utilization report, Industrial production declined 0.3 percent in January.

Key Points

  • Industrial production declined 0.3 percent in January, as unseasonably warm weather held down the output of utilities and as a major manufacturer significantly slowed production of civilian aircraft.
  • The index for manufacturing edged down 0.1 percent in January; excluding the production of aircraft and parts, factory output advanced 0.3 percent.
  • The index for mining rose 1.2 percent. At 109.2 percent of its 2012 average, total industrial production was 0.8 percent lower in January than it was a year earlier.
  • Capacity utilization for the industrial sector fell 0.3 percentage point in January to 76.8 percent, a rate that is 3.0 percentage points below its long-run (1972–2019) average.

Boeing Restart

One piece of good news: Boeing to Resume Max Production Before Flight Ban Is Lifted

Boeing Co. will resume production of the 737 Max before the best-selling plane is allowed back in the air as the company attempts to recover from one of the worst crises in its 104-year history.

Boeing expects global regulators to start clearing the aircraft to fly in the middle of this year, though senior sales executive Ihssane Mounir said Wednesday at the Singapore Airshow that the timings of their decisions may be different. Vice president of commercial marketing, Randy Tinseth, outlined the timetable to restart manufacturing and said any resumption would begin slowly.

When?

Leeham Pontifications: A few rays of sunshine emerge in MAX crisis

  • Worries about the production shutdown, its duration and lack of communication from Boeing prevailed. But there were in fact rays of sunshine beginning to break through the dark clouds of the last year. Some suppliers—not many—reported that they’ve been told to begin shipping parts and components as early as March 1.
  • This gives hope that production will resume in April.
  • To be sure, the good news is mixed with a lot of bad news for suppliers. Some laid off workers and more layoffs are yet to come.
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