Hurricane Harvey pushes US industrial production down by most in nine years

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Hurricane Harvey led to the shutdown of several Texas oil refineries (Source: Getty)

US industrial production fell last month for the first time since January, mainly due to Hurricane Harvey. 

Overall industrial production fell 0.9 per cent over the month after a July increase revised upward to 0.4 per cent, the Federal Reserve said today.

This went against expectations of a 0.1 per cent increase, and also represents the biggest monthly dip since May 2008.

Hurricane Harvey, which battered the US Gulf Coast in August, led to the shutdown of several oil refineries, which was one of the factors dragging on output. An "unseasonably mild" summer also put a dent in utility demand on the east coast, the Fed noted. 

According to the Fed, around 0.75 percentage points of the decline were due to the effects of the storm, which "temporarily curtailed drilling, servicing, and extraction activity for oil and natural gas".

The output of consumer goods fell 0.7 per cent as a rise in production of consumer durables was offset by declines in non-durables and consumer energy products. Production of motor vehicles and auto parts rose 2.2 per cent.

Utilisation of factory capacity fell 0.8 percentage point to 76.1 per cent, compared to a revised upward figure of 76.9 per cent in July, nearly four percentage points below the long run average.