U.S. manufacturing output rose 0.3% in September even as production of motor vehicles and parts fell 3.0%, the Federal Reserve reported on October 16. Total industrial production, which also includes mining and utilities, increased 0.7%, lifted by a 3.5% jump in utility output.

Total industrial production stood at 104.0% of its 2017 average in September and was 2.2% above its year-earlier level, according to the Fed’s G.17 release. Manufacturing output was 1.1% higher than in September 2025, mining 2.8% higher and utilities 8.7% higher.

The Fed also revised August up. Total industrial production for that month is now estimated to have edged up 0.1%, rather than holding flat, and the manufacturing decline for August was revised to 0.2% from 0.3%.

Inside the factory numbers

Durable manufacturing output ticked up 0.1% in September. Primary metals, machinery, and electrical equipment, appliances and components each posted gains of 1% or more, offsetting the 3.0% fall in motor vehicles and parts. Nondurable manufacturing rose 0.4%, led by printing and support and by chemicals.

The third quarter as a whole showed a wide gap between the two halves of manufacturing. Durable manufacturing output rose at an annual rate of 3.8%, which the release said was “driven in part by a 28.4 percent gain in the output of semiconductors and related electronic components.” Nondurable output fell at an annual rate of 1.6%. Overall manufacturing output increased at an annual rate of 0.7% in the quarter, while total industrial production rose at a 2.8% rate.

Among market groups, every major category rose in September except business equipment, which was unchanged. Consumer goods rose 0.7%, as gains in nondurable consumer goods more than offset a decline in durables. Construction supplies rose 1.0%, business supplies 0.9%, materials 0.7%, and defense and space equipment 0.4%. Business equipment output was 6.7% higher than a year earlier.

Capacity utilization

Capacity utilization for manufacturing rose 0.1 percentage point to 75.9% in September, the Fed said, “a rate that is 2.3 percentage points below its long-run (1972–2025) average.” Total industry utilization rose to 76.9%, 2.5 points below its long-run average.

Mining utilization was 87.5%, above its long-run average of 85.2%. Utilities ran at 73.8%, up 2.3 points in the month but well below their long-run average of 84.0%.

Outside manufacturing, mining output rose 0.2% in September and at an annual rate of 5.0% in the third quarter. The 3.5% gain in utility output came with increases in the indexes for both electric and natural gas utilities, and utility output rose at an annual rate of 14.8% in the quarter.

How the index works

The Fed describes the industrial production index as a monthly measure of real output in manufacturing, mining, and electric and gas utilities, expressed as a percentage of output in a base year, currently 2017. Capacity utilization is the seasonally adjusted output index divided by a matching index of sustainable potential output, so a falling rate can reflect either weaker production or added capacity.

Why it matters

For manufacturers, the September report shows output growth concentrated in particular industries rather than spread evenly. Semiconductors and related components drove much of the third-quarter gain in durable goods, while motor vehicles and parts pulled September’s durable reading down and nondurable output shrank over the quarter.

Utilization below its long-run average indicates that factories as a group were running with more spare capacity than usual. With manufacturing output up 1.1% over the year and business equipment output up 6.7%, the data show modest overall growth in factory production with stronger gains in equipment.

What to watch

The Fed plans to publish its annual revision to industrial production and capacity utilization on November 24, 2026. The revision will move the index to a 2022 base year and incorporate new Census Bureau benchmarks for manufacturing in 2023 and 2024, which may change the recent figures reported here.

The caveats

Monthly industrial production estimates are revised in later releases, as the changes to August show. The release reported motor vehicle and semiconductor movements at the industry level but did not explain the causes.