Manufacturing Output Rises; Operating Rate Above Long Run Average

U.S. factory output increased seven-tenths of a percentage point in April, the second consecutive monthly increase this year, the Federal Reserve reported on May 16. Its index for manufacturing production now stands at 114.3 (2002=100) and is 5.5% above the index figure for April 2005. In contrast, neither utility nor mining output has fared as well year-over-year. Mining output declined three-tenths of a percent between April 2005 and April 2006, while utility output rose 2.5%.

Among makers of durable goods, output gains greater than 1% were posted for nonmetallic mineral products; primary metals; machinery; computer and electronic products; electrical equipment, appliances and components; and aerospace and miscellaneous transportation equipment. Among makers of nondurables, output gains were recorded for paper; plastics and rubber products; and chemicals.

The factory operating rate last month was 80.8%, up from 80.4% in March and a full percentage point above its long-term average, the Fed said. A year ago, U.S. factories were operating at 78.4% of capacity, 2.4 percentage points below April's level.

Overall U.S. industrial production, which in addition to manufacturing includes utilities and mining, increased eight-tenths percent in April, and total industry capacity utilization was 81.9%, up from 81.4% in March.

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