U.S. industrial production dropped 0.3% in August, according to the Federal
Reserve Board Report on Industrial Production.
This is the first decline since December 2001, and included a 0.1% fall
in U.S. manufacturing output. Overall manufacturing output was still up
0.6% over August 2001, however.
Durable goods manufacturing, including bearings, was flat from July, but
up 0.8% from August 2001.
The August decline in manufacturing was primarily sparked by automotive
and light truck production cuts.
The automotive production cuts are the reverse of consumer
spending -- auto sales came close to setting new records in July and
August, spurred by 0% financing offers and generous rebates.
Overall, the U.S. economy is still expected to continue growing at
least at a 3% rate for the remainder of 2002.
Separately, the American Machine Tool Distributors Association
and the Association for Manufacturing Technology reported that U.S.
manufacturer demand for machine tools in 2002 has fallen dramatically
from 2001.
Machine tool sales through July were only $1.29 billion, down
24% from $1.69 billion for the same period in 2001. The report is
based on a survey of 200 primary metals manufacturers.
Only manufacturers in the Northeast and Central regions were buying
more tooling;
every other area of the country reported collapsed demand. In the
Southern U.S., for example, sales were down 52% from 2001.
Some of the dropoff is cyclical, due to the every-other-year IMTS
manufacturing technology show held in Chicago. Just concluded, the IMTS
show causes many manufacturers to hold off machine tool purchases until
they can see first hand the latest available technologies and machining solutions.
In a statement, the group said, "The summer months preceding the biennial
International Manufacturing Technology Show ... typically slow as customers
await the unveiling of new products and technologies."
The bearing industry, usually considered a leading (predictive) indicator
of U.S. manufacturing activity, has yet to see any widespread or predictable
strength from any sector other than aerospace. In addition, an expected boom
in the OEM market for
heavy truck bearings seems to have ended without fully materializing
as expected. New emissions regulations going into effect next month had fleet
buyers moving up their purchases to beat the deadline, but economic pressures
have forced them to scale back again on those acquisitions.
As one bearing manufacturer told eBearing, "We've said we're waiting for second
quarter, then third quarter, then fourth quarter. Now I don't know what
we're waiting for; it could turn around tomorrow or next year."