U.S. industrial production ticked up 0.1% in August, reversing a 0.4% decline in July, as motor vehicles and parts rebounded 2.6%. Manufacturing output rose 0.2%, mining increased 0.9%, and utilities fell 2.0% on softer electricity generation. At 103.9% of its 2017 average, the index was up 0.9% from August 2024. Overall capacity utilization held at 77.4%, 2.2 points below its long-run (1972–2024) average; manufacturing utilization edged up to 76.8%, mining to 90.6%, and utilities slipped to 68.6%.
Economists caution that the gains are narrow. “Auto production rose 2.5% in August, but non-auto manufacturing remained unchanged. That shows the strength is still very narrow,” said Brian Wesbury, chief economist at First Trust Advisors in a blog post. He noted high-tech equipment production dipped 0.1% in August even as it remains up 13.8% year after year, suggesting capital investment may level off.
Regional data echoes the mixed picture. The Philadelphia Fed’s August Manufacturing Business Outlook Survey reported that current activity and new orders slipped into negative territory while shipments declined but stayed positive. Firms still expect modest growth over the next six months, and both price indexes remained elevated signals of persistent cost pressure.
The labor backdrop is soft. U.S. manufacturers shed 12,000 jobs in August, according to the National Association of Manufacturers’ summary of the Bureau of Labor Statistics report, reinforcing signs that firms are reluctant to expand headcount.
What it means for distributors: Purchasing is likely to remain choppy, with strength clustered in auto-related accounts and mining, while capital goods and fabricated metals lag. Elevated input costs and tariff uncertainty are curbing restocking appetite, even as some categories post isolated gains. The Philadelphia Fed’s special questions showed half of surveyed firms said core customers have become more price sensitive since last quarter, and most expect competitors to raise prices within three months—conditions that typically push buyers to defer or fragment orders.
What is next: The Federal Reserve said it “tentatively plans” to issue its annual benchmark revision to industrial production in the fourth quarter of 2025, incorporating new data from the U.S. Census Bureau and U.S. Geological Survey. That update could alter the perceived momentum across sectors. Until then, distributors should plan for a patchwork landscape: autos and mining doing the heavy lifting, with broad manufacturing demand still tentative.
“As it stands, this isn’t a strong industrial rebound—it’s a mixed picture,” Wesbury said. “The auto sector is doing the heavy lifting right now.
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