WASHINGTON – U.S. factory, mine and utility output fell 0.7 percent last month, after rising a revised 0.2 percent in March, the Federal Reserve reported today.
Analysts had expected industrial production to decline only 0.3 percent last month, based on the median forecast from a Bloomberg News survey of 76 economists. (Their projections ranged from a 0.8-percent decline to a 0.7-percent increase.)
Manufacturing production fell 0.8 percent in April. “As was the case in March, factory output in April was held down by a large drop in the index for motor vehicles and parts,” the Fed noted. “Strikes and strike-related [auto] parts shortages resulted in suspended production at many facilities.”
Excluding automobiles and auto parts, manufacturing production fell 0.4 percent last month after rising 0.3 percent in March. Utility output rose 0.3 percent in April, while the output of U.S. mines fell 0.8 percent.
Compared with April 2007, overall industrial production increased 0.2 percent – to 111.2 percent of the benchmark 2002 average – as manufacturing output fell 0.3 percent, utility output rose 0.8 percent and mining output rose 3.1 percent.
Meanwhile, the nation’s total industrial capacity increased 1.9 percent compared with a year ago. Capacity utilization – a measure of the proportion of industrial plants in use – rose 0.7 percentage points to 79.7 percent. Over the past 30 years, the central bank noted, utilization has averaged 81 percent.
“Manufacturing is now showing clear evidence of weakening,” Michael Feroli, an economist at JPMorgan Chase & Co. in New York, told Bloomberg News. “We will see a continued slowdown in the economy, but no collapse. The industrial sector isn’t going to escape the slowdown.”
Additional economic research data, including the full Industrial Production and Capacity Utilization release is available from the Federal Reserve System at www.federalreserve.gov.
