U.S. industrial production edged higher in November, but persistently low-capacity utilization underscores a manufacturing sector still operating with significant slack, according to data released by the Board of Governors of the Federal Reserve System.
Industrial production rose 0.2% in November after a 0.1% decline in October. Over October and November combined, output increased at an average monthly pace of 0.1%, matching September’s growth rate but trailing the average pace of the prior 12 months. Compared with a year earlier, total industrial production was up 2.5% in November and stood at 101.8% of its 2017 average.
Manufacturing output was flat in November following a 0.4% drop in October, reflecting continued unevenness across industrial categories. Gains in mining output offset mixed results in utilities, which posted robust growth in October before easing in November.
Capacity utilization across total industry slipped to 76.0% in November, down slightly from October and 3.5 percentage points below its long-run average for the 1972–2024 period. Manufacturing capacity utilization held steady at 75.4%, three percentage points below its historical norm, signaling limited pressure on factories to expand output.
Among major market groups, production of business equipment rose 0.3% in November and was up 11.2% from a year earlier, driven by continued gains in information processing equipment. Output tied to construction declined 0.6% for the month but remained 2.3% higher year over year. Consumer goods production increased 0.3% in November, though durable goods continued to weigh on results as motor vehicles and parts posted sharp declines in both October and November.
Mining output rebounded 1.7% in November after falling 0.8% in October, lifting mining capacity utilization to 86.3%, above its long-run average. Utilities utilization, by contrast, remained well below historical norms at 70.9%.
The release also incorporated revisions to industrial production and capacity utilization data back to May, reflecting the Federal Reserve’s annual benchmark update. The revision incorporated new data from the U.S. Census Bureau, U.S. Geological Survey and Department of Energy, as well as updated industry weights and classification changes.
What it means for wholesale distributors
For wholesale distributors, the November data points to stability rather than acceleration in industrial demand heading into early 2026.
Low-capacity utilization suggests manufacturers still have ample room to meet demand without significantly increasing production, limiting the likelihood of broad-based restocking cycles. Instead, purchasing activity is likely to remain selective and uneven by end market.
Category-level performance remains critical. Distributors serving business equipment, industrial electronics and technology-related supply chains are benefiting from stronger underlying demand, while those tied closely to automotive and other durable goods sectors continue to face headwinds.
Construction-related output remains positive on a year-over-year basis but volatile month to month, supporting steady maintenance and repair demand rather than a surge in large-scale new projects. At the same time, subdued utilization rates upstream reduce pricing pressure, reinforcing a competitive environment for distributors, and placing greater emphasis on inventory discipline, pricing analytics, and operational efficiency.
Overall, the Fed’s latest industrial production report reinforces a picture of slow, uneven industrial growth, favoring distributors with diversified end-market exposure and strong execution over those positioned for a broad manufacturing rebound.
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