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First Cut: October industrial production down on motor vehicles

Industrial production was down 0.8% in October from September as the strike at GM cut heavily into the manufacturing sector. Manufacturing was down 0.6% month-over-month and was driven by a 7.1% decline in motor vehicles and parts. The strike was resolved late in October and November numbers should rebound, at least partially. Excluding manufacturing, industrial production was down 0.2%.

Mining was down 0.7% with oil and gas well drilling down 5.1%. Utilities output was off 2.6% in October relative to September. Electric output was down 4.0% while natural gas was up 5.0%.

It is a little hard to get a read on underlying conditions behind the 5 weeks of the UAW strike at GM. Factory shutdowns may have reduced demand for utilities as well as spilling over into some related sectors to materials for auto building. Nonetheless, surveys of the manufacturing and service sectors suggest that production is likely to remain sluggish even after the strike effects are accounted for.

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