Industrial production in the U.S. advanced in September, helped by a strong upswing in output of business equipment and consumer durables, new data indicate.

Industrial production in the United States edged up 0.2 percent last month, as a gain in manufacturing offset a drop in utility output, a sign manufacturers are contributing to growth, according to the U.S. Federal Reserve this week. Overall industrial production was initially reported to have increased 0.2 percent in August, but yesterday’s Fed report included a downgrade of August’s reading to reflect no change in monthly output.

The increase in output at factories, mines and utilities last month is in line with the median estimate of economists polled in a Bloomberg News survey.

Production at mines advanced 0.8 percent in September, and utilities output dropped 1.8 percent.

Meanwhile, the Fed’s latest industrial sector report indicates that manufacturing production rose 0.4 percent after a 0.3 percent gain in August. September’s factory gain was led by business equipment production, which rose 1 percent and is up 10.3 percent from September 2010. Transit equipment and information processing equipment advanced 1.9 percent and 1.4 percent, respectively.

“For the third quarter, the output of business equipment rose at an annual rate of 12.6 percent,” the Fed report states. “The output of transit equipment jumped 31.8 percent, the largest increase among the major components of business equipment for the quarter. The principal contributors to the gain were civilian aircraft and trucks.”

Consumer durables increased 0.9 percent in September, as production of home electronics increased for a fifth month straight and automotive products for a third, more than offsetting a 2.2 percent decline in the production of appliances, furniture and carpeting. The output of motor vehicles and parts increased 0.7 percent after climbing 1.5 percent in August.

“The schisms between consumer goods output and business equipment output as well as between durable and non-durable manufacturing performance are well indicative of the swirl of murky factors that are creating so much short-term uncertainty,” Cliff Waldman, economist for the Manufacturers Alliance/MAPI, wrote in an analysis of the Fed report. “Consumer goods output during August and September was flat and would have been negative had it not been for continued strength in automotive production in the wake of the normalization of auto supply chains.”

Analysts say that last month’s uptick was a modest move in the right direction.

Manufacturing growth for the third quarter of 2011 totaled 4.3 percent, up from a 0.1 percent decline in Q2 but below the 7.2 percent rise in Q1.

“Mixed into the third quarter performance and the September report is a range of factors that reflect short-term recovery from the Japanese and Middle East shocks that so distorted economic activity during the first half of the year as well as clear indications of a slowing global economy and a sluggish and uncertain U.S. economy,” according to Waldman. “The murky outlook for the U.S. economy and clear signs of significant stresses in the global growth environment, most importantly in large emerging market economies, suggest that there are downside risks for U.S. manufacturing. A modest slowing is the most likely outcome, but something worse cannot be ruled out.”

Industries used 77.4 percent of their capacity in September, up from 77.3 percent in August. Last month’s capacity utilization rate for total industry was 1.7 percentage points above its prior-year level but 3.0 percentage points below its long-run (1972-2010) average.

Earlier: Industrial Production up in August

Resources

Industrial Production and Capacity Utilization
U.S. Federal Reserve, Oct. 17, 2011

Industrial Production in U.S. Increases 0.2% on Demand for Cars, Computers
by Alex Kowalski
Bloomberg News, Oct. 17, 2011

Analysis on Industrial Production: ‘Mixed Performance’ in September
by Cliff Waldman
Manufacturers Alliance/MAPI, Oct. 17, 2011

Manufacturing Notches Slight Gains
by Sara Murray
The Wall Street Journal, Oct. 17, 2011

Industrial Output Up, NY Manufacturing Contracts
by Leah Schnurr
Reuters, Oct. 17, 2011

Factory Output Rises on Truck, Airplane Demand
by Daniel Wagner
The Associated Press, Oct. 17, 2011