Big jump in factory utilization for January

February 18, 2026

Industrial production jumped 0.7% in January, beating market expectations for a 0.4% increase. December's output was revised down to 0.2% from 0.4%, while November was revised down to 0.1% from 0.4%. The total industrial production index has risen 2.3% from a year ago; that's up from a 2.0% annualized rate in December.

Two of the three main industry groups contributed to January's strength. Utilities output soared 2.1% in January after a 3.0% rise in December due to heating needs from bitterly cold temperatures in the Midwest and a winter storm that affected much of the South and East coast. Manufacturing output expanded by 0.6% in January as gains were broad-based. Mining fell 0.2%, the second month in a row of declines. Oil prices have weighed on mining output; they are too low to clear the breakeven level to start new drilling. 

Manufacturing output posted the largest increase since February 2025, with broad-based gains. Durable goods manufacturing rose 0.8%, driven by large increases in nonmetallic minerals, machinery, computer and electronics and motor vehicles and parts. The increase in motor vehicles production was the first since August. We are seeing effects from the data center buildout for artificial intelligence (AI) in components like electronics and electrical equipment. However, much of what goes into data centers is imported, which acts as a drag on overall GDP.  The durable goods data revealed a surge in December orders for computer equipment and electronics.

Separately, the aerospace sector is finally normalizing after several years of setbacks. Production is finally back on line with a backlog stretching into the 2030s.

Nondurable manufacturing rose 0.4%. Increases in plastics, chemicals, paper and printing more than offset declines in petroleum and coal products, apparel, textiles and food and beverage.

Construction supplies bucked the trend and gained 0.5% during the month. We saw increases in January for wood products, iron and steel, fabricated metals and other components that feed the industry.

There was a strong increase in capacity utilization. Manufacturing utilization increased 0.4 percentage points to 75.6%, the highest level since September, driven mainly by durable goods.