Industrial production waned in August

September 18, 2026

August industrial production came in flat, the weakest reading in five months, missing expectations for a 0.3% rise. A downside surprise was considered a possibility due to softer vehicle assembly rates in August. Manufacturing output declined 0.3%, the sharpest drop since October 2025. Utility output rose 1.8% with hot weather. Mining output edged up 0.1%. If it weren't for the weather and high utility usage to offset the manufacturing drop, overall industrial output would have declined on net last month. 

A 1.2% drop in motor vehicles and parts production led the slide in manufacturing output; those two categories fell 0.8% the previous month. Manufacturers use the summer months as a retooling period when auto makers idle assembly lines to switch over to new models for the upcoming year. Although seasonal adjustments attempt to compensate for these recurring annual events, the shutdown weeks do not always line up from year to year.

Aerospace production fell 1.2% while even computers and electronics fell 0.5%. Primary metals slipped 0.3% as fabricated metals also lost ground. 

Information processing equipment output decreased by 0.5%. There is a growing backlash against data center construction, but we believe it is too early to see a big shift in the space. It is expanding at a 7-8% annual pace in recent months, double the 4% annual growth at the start of the year. 

Utility output jumped 1.8%, the largest increase in eight months due to cooling needs. Soaring temperatures drove electric utility output higher, up 2.1%, the biggest increase since December 2025. August was the warmest on record (1895 to present).