Industrial output growth seen slower in September

Factory production was predicted to post a 0.1 percent increase last month, lower than the 0.2 percent rise in August, the poll showed.

The 68 estimates on September industrial output ranged from a 0.1 percent dip to a 0.5 percent gain.

Despite slowing manufacturing growth, the utilization rate at factories and power plants likely held steady at 82.2 percent due to power generation for cooling due to unseasonably warm weather in September, analysts said.

The 61 forecasts on capacity utilization last month ranged from 81.9 percent to 82.5 percent.

The Federal Reserve will release its September readings on industrial output and capacity use on Tuesday at 9:15 a.m.

The following is a selection of comments from economists from their research reports released late Friday:

BANC OF AMERICA SECURITIES

Forecast: industrial production: +0.1 pct

capacity utilization: 82.1 pct

"The recent slide in factory orders, along with flat manufacturing hours worked in September, point to weak factory activity in the month. While warmer-than-normal weather persisted following a hot August, the utility component likely has little upside potential. However, a solid increase in the aggregate hours index for mining suggests that this component posted a gain."

CITIGROUP

Forecast: industrial production: +0.2 pct

capacity utilization: 82.2 pct

"Industrial output probably edged higher in September, with manufacturing leading the way. Although the number of cooling days was abnormally high last month, we do not anticipate an increase in utilities usage because the August level was already elevated."

MERRILL LYNCH

Forecast: industrial production: -0.1 pct

capacity utilization: 82.0 pct

"Industrial production probably slipped 0.1 pct MoM (month over month) in September, following three consecutive months of increases. Manufacturing production is expected to increase a modest 0.1 percent, as a decline in motor vehicle production will be offset by increases in high-tech production. We look for mining production to increase a sturdy 0.5 percent, following a 0.7 percent slip last month. Utilities likely pulled back, as electricity output fell 2.7 percent in September."

(Polling by Bangalore Polling Unit)