The FINANCIAL — U.S. industrial production declined for the third straight month in November, a reflection of low oil prices, softening demand for many long-lasting manufactured goods and warm weather’s effect on utility use, according to Nasdaq.
Industrial production, a broad measure of everything produced by American factories, mines and utilities, fell a seasonally adjusted 0.6% from a month earlier, the Federal Reserve said on December 16. That was the sharpest drop since March 2012.
Capacity utilization, which measures slack across industrial firms, fell in November to 77% from 77.5% in October. That was the lowest level in two years. Before the 2007-2009 recession, capacity use typically hovered above 80%.
Manufacturing output, which accounts for almost three-quarters of overall industrial production, was flat last month, as falling production of autos, electrical equipment, metals and appliances canceled out increases for food and other nondurable goods.
Manufacturers have been pinched by a strong dollar, which makes American exports more expensive overseas and imports cheaper at home, alongside weak foreign demand for many products.
Mining output declined 1.1% in November and was 8.2% below its level from a year earlier. The index for oil and gas well drilling was less than half its November 2014 level.
Crude oil prices have crashed since last year, with a barrel selling for less than $35 dollars on the New York Mercantile Exchange earlier this week. Just last year, the price reached over $100. That has caused energy companies to curtail operations.
Output at utilities fell by 4.3% in November, a reflection of warm weather.