Markets

Factory Output in U.S. Declines on Weaker Auto Production

Published

7 years ago

August 17, 2017

Factory Output in U.S. Declines on Weaker Auto Production

A slump in motor vehicle production pushed down U.S. factory output unexpectedly in July, Federal Reserve data showed Thursday.

HIGHLIGHTS OF INDUSTRIAL PRODUCTION (JULY)
Factory output dropped 0.1% (est. 0.2% gain) after 0.2% gain Total industrial production, which also includes mines and utilities, increased 0.2% (est. 0.3% rise) after a 0.4% rise Manufacturing output minus motor vehicles rose 0.2%, reflecting a pickup in non-durable goods production

Key Takeaways

Automobile production fell 3.6 percent in July, the fourth decline in the last five months. That reflected a slowdown in sales that were a bright spot for the economy in recent years. While factory production excluding automobiles increased, the data showed some other areas of softness. Output of business equipment and construction materials dropped for the second time in three months.

While manufacturing is projected to continue to grow, an acceleration in the near term would require bigger gains in household demand, business investment and stronger global sales.

The monthly data, which are volatile and often get revised, contrast with other recent reports. While the Institute for Supply Management’s factory index eased in July from the second-highest level since 2011, it showed steady growth in production, orders and employment. The latest Empire State Manufacturing survey for August also posted a strong gain.

The Fed said the data were inadvertently posted early on its website. The report was scheduled for release at 9:15 a.m. in Washington.

Economist View

“Recent national ISM survey data point to much improved conditions in the manufacturing sector (as do the less reliable regional indices), ” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., wrote after the report. “We expect the underlying trend of reported output to gradually accelerate in the months ahead, although ongoing inventory adjustment in the automotive sector will continue to weigh.”

Other Details

Capacity utilization, measuring the amount of a plant that is in use, held at 76.7 percent (matching est.)
Utility output increased 1.6 percent after falling 1.2 percent the prior month
Mining production rose 0.5 percent; oil and gas well drilling decreased 0.9 percent
Production of consumer goods increased 0.2 percent, reflecting a 0.8 percent advance in the output of non-durables including chemicals and food
Output of business equipment fell 0.5 percent, while production of construction materials dropped 0.4 percent

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Crude Oil

Oil Prices Rebound on OPEC+ Output Delay Talks and U.S. Inventory Drop

Published

2 days ago

September 5, 2024

Samed Olukoya

Oil prices made a modest recovery on Thursday on the expectations that OPEC+ may delay planned production increases and the drop in U.S. crude inventories.

Brent crude oil, against which Nigerian oil is priced, rose by 66 cents, or 0.9% to $73.36 per barrel while U.S. West Texas Intermediate (WTI) crude appreciated by 64 cents or 0.9% to $69.84 per barrel.

The rebound in oil prices was a result of the American Petroleum Institute (API) report that revealed that the U.S. crude oil inventories had fallen by a surprising 7.431 million barrels last week, against analysts 1 million barrel decline projection.

The decline signals better than projected demand for the commodity in the United States of America and offers some relief for traders on global demand.

John Evans, an analyst at PVM Oil Associates, attributed the rebound in crude oil prices to the API report.

He said, “There is a pause of breath and light reprieve for oil prices.”

Also, discussions within the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, are fueling speculation about a potential delay in planned output increases.

The group was initially expected to increase production by 180,000 a day in October 2024.

However, concerns over softening demand in China and potential developments in Libya’s oil production have prompted the group to reconsider its strategy.

Despite the recent rebound, analysts caution that lingering uncertainties around global oil demand may continue to weigh on prices in the near term.

Energy

Power Generation Surges to 5,313 MW, But Distribution Issues Persist

Published

3 days ago

September 4, 2024

Samed Olukoya

Nigeria’s power generation continues to get better under the leadership of President Bola Ahmed Tinubu.

According to the latest statement released by Bolaji Tunji, the media aide to the Minister of Power, Adebayo Adelabu, power generation surged to a three-year high of 5,313 megawatts (MW).

“The national grid on Monday hit a record high of 5,313MW, a record high in the last three years,” the statement disclosed.

Reacting to this, the Minister of Power, Adebayo Adelabu, called on power distribution companies to take more energy to prevent grid collapse as the grid’s frequency drops when power is produced and not picked by the Discos.

He added that efforts would be made to encourage industries to purchase bulk energy.

However, a top official of one of the Discos was quoted as saying that the power companies were finding it difficult to pick the extra energy produced by generation companies because they were not happy with the tariff on other bands apart from Band A.

“As it is now, we are operating at a loss. Yes, they supply more power but this problem could be solved with improved tariff for the other bands and more meter penetration to recover the cost,” the Disco official, who pleaded not to be named due to lack of authorisation to speak on the matter, said.

On Saturday, the ministry said power generation that peaked at 5,170MW was ramped down by 1,400MW due to Discos’ energy rejection.

Crude Oil

Again NNPC Raises Petrol Price to N897/litre

Published

4 days ago

September 4, 2024

Investors King

The Nigerian National Petroleum Company (NNPC) Limited has once again increased the price of Premium Motor Spirit (PMS) from N855 per litre on Tuesday to N897 on Wednesday.

The increase was after Aliko Dangote, the Chairman of Dangote Refinery, announced the commencement of petrol production at its refinery.

The continuous increase in pump prices has raised concerns among Nigerians despite the initial excitement from the refinery announcement.

According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the 650,000 barrels per day refinery will supply 25 million litres of petrol to the Nigerian market daily this September.

This, NMDPRA said will increase to 30 million litres per day in October.

However, the promise of increased fuel supply has not yet eased the situation on the ground.

Tunde Ayeni, a commercial bus driver at an NNPC station in Ikoyi, said “I have been in the queue since 6 a.m. waiting for them to start selling, but we just realised that the pump price has been changed to N897. This is terrible, and yet they still haven’t started selling the product.”

The price hike comes as NNPC continues to struggle with sustaining regular fuel supply.

On Sunday, the company warned that its ability to maintain steady distribution across the country was under threat due to financial strain.

NNPC cited rising supply costs as the cause of its difficulties in keeping up with demand.