BMO Nesbitt Burns sees no sign of a turnaround in the latest Industrial Production and Capacity Utilization numbers released in the United States.

“There are few signs that U.S. manufacturing is about to turn the corner,” says BMO Nesbitt Burns. “In fact, the downturn seems to be picking up speed. Industrial production fell a slightly-greater-than-expected 0.7% in June, but that was from an upwardly revised 0.5% decline in May. Output has thus fallen for nine straight months and is down by 3.7% on year-ago levels. For the first half of the year, production dropped by 3.2%, the largest decline over a six-month period since 1990. Further, production has slowed for the last three quarters, with the most recent having the largest retreat.”

Auto parts and high tech were the weakest sectors. The 2.1% slide in autos and auto parts just offset the upward revision in May. The lone bright spot in the report was the 0.9% increase in utilities production.

“Factory utilization dropped to a recession-like 75.5%, while overall capacity utilization fell by a further 0.6 percentage points sits at its lowest level since 1983,” notes BMO. “This report dispels the notion that U.S. manufacturing has bottomed. With no inflation pressure, profits still under pressure and a dollar that continues to do significant damage, there remains room for the Fed to trim rates further.”