US manufacturing production stops shrinking in September

US industrial output edged higher in September thanks to a small rebound in factory activity and at mines, with manufacturing sector activity no longer shrinking in comparison to a year ago.

Total US industrial production grew by 0.1% month-on-month (consensus: 0.2%), according to data from the Federal Reserve.

By major market groups, output of final products 0.1% higher despite a 0.2% decrease in that of business equipment.

Production of non-industrial supplies on the other hand expanded by 0.7% over the month, boosted by a 0.8% jump in construction sector output.

Output of materials on the other hand declined by 0.2% on the month.

Looking at the different indsutry groups, factory output was up by 0.2% (consensus: 0.2%) on the month, mining sector activity increased 0.4% while that from utilities fell by 1.0% against August.

In comparison to the same month of 2015 manufacturing production was unchanged.

The degree of capacity utilisation edged up by one tenth of a percentage point to 75.4% (consensus: 75.6%), with that in manufacturing increasing from 75.3% to 75.4% while in mining it grew from 75.0% to 75.5%.

Capacity in use among utilities on the other hand dropped from 80.0 to 79.1%.

"Mining production [...] is showing tentative signs of stabilization, as rig counts are edging higher, indicating that mining should no longer be a large drag on monthly IP growth.

"Manufacturing production was flat compared with a year ago, suggesting that the US manufacturing sector has stabilized following the hit from slow growth abroad and past appreciation of the dollar. Soft readings on production and new orders from manufacturing surveys indicate that the subdued trend in manufacturing is likely to continue for next few months. Overall, these factors suggest that the outlook for the US industrial sector is likely one of generalized stability, although we do not expect spectacular growth in the coming months," said Barclays Research's Blerina Uruci.