US industrial production likely grew in January on non-automotive manufacturing

US industrial production likely grew 0.4% in January with the help of a projected increase in non-automotive manufacturing, along with weather-related snapback in utilities generation. The industrial production had dropped in December.

"Our forecast - the first increase since last August - would place January's output level 0.5% annualised below the October-December average, following a 3.4% contraction during the autumn quarter", says Societe Generale.

Production at factories, restricted by a likely decline in motor vehicle output in the reference period, is expected to have grown 0.3%, erasing the decline registered in November and December of 2015. Meanwhile, a return to normal temperatures in January is likely to have increased natural gas and electricity distribution by 2.8%, contributing nearly two-thirds to the industrial production growth.

The mining sector is expected to have remained weak in the starting of 2016, with output dropping for the fifth consecutive month. With industrial production overshadowing anticipated additions to capacity in January, the overall operating rate possibly increased to 76.7%, but continued to be lower than Q4's average of 77%.