Industries

Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

Industrial production beats expectations

Seasonal auto production and heatwaves distorted July data.

August 16, 2023

Industrial production surged 1% in July, the largest increase since January of this year when it also rose by 1%. July’s outcome beat consensus expectations for a 0.3% rise. June industrial output was revised lower to -0.8% from -0.5%. 

All three industry groups contributed to the strength in July output. Manufacturing production rose 0.5% as a 5.2% jump in motor vehicle and parts production contributed to the bulk of the gain. Excluding motor vehicle and parts, manufacturing output rose only 0.1%.

The summer months of June, July and August are typically shutdown periods for U.S. automakers. Some retool their plants in June, others in July or August. The rise in July motor vehicle output can be considered a rebound from June when it fell 3.9% as some initiated their shutdowns earlier in the summer.

Utility output jumped 5.4% with electric usage up 6.7% and natural gas down 2%. Blame continuously running air conditioners for higher electric demand. The average temperature during July was 76.4°F, 2.8°F above the 20th century average; it was the third warmest in the 128-year record reported the National Oceanic and Atmospheric Administration. The Federal Reserve, which reports industrial production, noted that higher temperatures in July raised demand for cooling.

Mining output rose 0.5% after two months of declines. In July, West Texas Intermediate crude oil prices reached $82 per barrel, the highest in nine months and likely spurred drilling activity due to better break-evens.

Production tied to business investment rose in July, aided by subsidies for semiconductor chip and electric vehicle plants. Business equipment output rose 1% and information processing increased 0.5%.

Defense and space equipment output rose 1%, the third consecutive month of an increase of 1% or better, due to higher military spending associated with the Russia-Ukraine war.

On an annual basis, total industrial output fell 0.3% in July after -0.7 in June and -0.1% in May.

We remain guarded about the outlook for the overall industrial sector.

Bottom Line:

The headline figures are less rosy than they appear. We saw a rebound in activity due to catch-up in vehicle production and blistering heat. Federal government subsidies for strategically important sectors and the war in Ukraine contributed to those gains. However, the manufacturing sector is declining on an annual basis. Purchasing managers' indexes (PMIs) remain below 50, which indicates that manufacturing activity is contracting. Until the PMIs move above 50, we remain guarded about the outlook for the overall industrial sector.

Explore more

Meet our team

Image of Kenneth Kim
Kenneth Kim
Senior Economist, KPMG Economics, KPMG US

Subscribe to insights from KPMG Economics

KPMG Economics distributes a wide selection of insight and analysis to help businesses make informed decisions.

Thank you

Thank you for subscribing. You should receive a confirmation e-mail soon.

Subscribe to insights from KPMG Economics

Now more than ever, companies are using data to make informed decisions about the future of their business. KPMG Economics is continuously monitoring and analyzing economic and geopolitical data so we can provide business leaders with reliable and timely insight and analysis.

To receive our Economic Updates and other relevant content published by the KPMG Economics as soon as it is released, please provide the following details:

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline