Chicago Fed Midwest Manufacturing Index edges up in December

Led by a boost in auto production, manufacturing activity in five Midwestern states increased by a modest 0.1 percent in December, according to data released Monday by the Federal Reserve Bank of Chicago.

The Chicago Fed Midwest Manufacturing Index reading in December stood at 104.7, up from 104.6 in November. The November figure was revised downward from 105.0, but remained above October's 104.5.

The Chicago Fed index measures manufacturing activity based on monthly changes in hours worked in the heavily industrialized states of Illinois, Indiana, Iowa, Michigan and Wisconsin.

Of the four manufacturing sectors analyzed by the Chicago Fed, regional auto production posted the strongest gain. Midwest auto output rose 0.3 percent in December after increasing 0.8 percent in November. On a national basis, auto manufacturing dropped 0.1 percent in December, but was 1.6 percent higher compared with the same time a year ago. Regional auto output was just 0.1 percent above its year ago level, the Chicago Fed reported.

The data also showed resource output rose 0.2 percent in December, after a 0.2 percent drop in November. Nationally, the resource sector was down 0.2 percent last month. Compared to December 2006, regional resource output increased 1.4 percent versus a 0.8 percent gain nationwide.

The Chicago Fed said machinery output registered a modest 0.1 percent gain in December, swinging from a 0.2 percent decline in November. Midwest machinery production lagged behind the nation as a whole, which posted a 0.5 percent rise in December and a 4.5 percent increase versus the same time a year ago. On a regional basis, year-over-year machinery production fell 2.5 percent.

Regional steel production was the only sector to show a monthly decline, down 0.8 percent in December after rising 0.5 percent in November. National steel output also dropped 0.8 percent last month, but was 3.8 percent above its December 2006 level. Regional steel output lagged behind the nation on a year-over-year basis, increasing 2.5 percent, according to the Chicago Fed report.

January's Midwest manufacturing index is scheduled to be released on March 17.