The latest statistics from the Federal Reserve show that industrial production suffered a pretty significant setback to start the year. That said: the hope is that most of the sluggish performance can be tied to severe winter weather in many parts of the country.
The Fed noted that industrial production decreased 0.3% in January,
freefalling from the 0.3% increase the previous month that inspired
great optimism. Still, January’s level, at 101% of the 2007 average, was
nearly 3% higher than the production level of January 2013 even if it
was below the long-term average.
The drop in industry manufacturing was particularly noticeable, down
0.8% from December, after five consecutive months of gains. In fact, it
was among the largest decline in manufacturing output since the end of
the Great Depression. Industries with the worst pace drop-offs for the
month were steel, semiconductors, motor vehicles and organic chemicals
production. Agricultural and textile production decrease dubiously
headlined slowing output in the nondurable manufacturing category, also
down 0.8% in January.
Fed analysts and officials hinted that winter storms that hit the
Midwest and Eastern seaboard particularly hard made it near impossible
for output to match that of previous months.
- Brian Shappell, CBA, CICP, NACM staff writer