Industrial Production, Capacity Figures Bleak for Trucking

In a bleak report for trucking, industrial production fell 0.8% in October, according to the Federal Reserve. The drop in production at the nation's mines, factories and utilities was the largest since Sept. 2001.

Manufacturing production, the most important component of the report, according to Bob Costello, chief economist for American Trucking Associations, fell 0.7%.

"That's a little bit less than the overall figure, but still not good," Costello said. "That doesn't bode well for the trucking industry."

Costello said the decline was expected, however, based on previous data on orders.

Year-over-year production is still up 1.3%, but Costello said it was important to remember that "October was so weak for so many things last year," due to the economic slowdown in the wake of the Sept. 11 attacks.

Manufacturing production has declined for each of the last three months, according to the Fed’s data, and each time by a wider margin.

"The trend over the last three months has been troubling," Costello said. "It's building steam in terms of its negativeness."

Capacity utilization fell to an 18-year low of 75.2%, the Fed said in its report. The decline in factory use is "really quite troubling" to Costello.

"Capacity utilization has fallen about a percentage point over the last four months, and is quite low in historical terms," Costello said. "If manufacturers aren't better utilizing the equipment they have, there's no reason for them to purchase new equipment and increase capacity because they aren't really utilizing what they've got, and that's capital investment and that's really what we'd like to see to turn the economy around."

The bleak outlook was buttressed by negative government reports on business inventories and producer prices.