U.S. Factories, Mines, Utilities Cut Output

By Agence France-Presse U.S. factories, mines and utilities unexpectedly slashed output 0.5% in the month to April, data showed May 15, deepening gloom over hard-hit industries. "The manufacturing sector is hurting obviously very badly," Naroff Economic Advisors President Joel Naroff said. "This was a pretty ugly report, to say the least." Manufacturers lowered output 0.6%, reining in construction and non-industrial supplies. Mines increased production 0.4%. Utilities boosted output 0.1%. When compared with April 2002, overall industrial production was down 0.4%, Federal Reserve figures showed. "It was so broad based as to indicate that there are real problems in manufacturing at this point," Naroff said. "We can try and say that it is just April. But we need something to happen pretty quickly." Among the key figures, production of construction supplies slid 0.8% -- the eighth fall in a row. Production of non-industrial supplies such as business equipment fell 0.6%. Output of consumer goods tumbled 0.4%, and motor vehicle and parts production dropped 2.0%. Production of computers, communications equipment and semiconductors -- a broad measure of the high-technology sector -- rose 1.0%. Overall, the declines were steeper than expected, said Paul Ferley, BMO Financial Group senior economist. "It is a bit discouraging to see continuing declines in these areas," Ferley said. "It could still be that the geopolitical uncertainties are still weighing on some of these indicators. The May data are going to be more telling." U.S. industry operated at 74.4% of total capacity in April, falling from 74.8% in March to hit the lowest level in 20 years, the Federal Reserve said. In March, overall industrial output had declined 0.5% from the previous month. Copyright Agence France-Presse, 2003

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