U.S. Industrial Production Declined 0.2% in May

Manufacturing output was unchanged.

After having fallen 0.7% in April, industrial production declined 0.2% in May, the Federal Reserve said on July 17.

Manufacturing output was unchanged in May. Factory output was boosted by a small pickup in the index for motor vehicles and parts. The end in late May of the strike at a parts producer had little effect on vehicle output for the month; the output of motor vehicles and parts remained about 10% below its February level.

Excluding motor vehicles and parts, manufacturing production edged down 0.1% after having decreased 0.5% in April.

"The recession in manufacturing is concentrated in industries supplying the construction sector and the motor vehicles industry. And the downturn is aggravated by the structural losses of textiles and apparel industries in the U.S.," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "Despite these negative forces, the manufacturing downturn is not a cave-in like that which occurred in the early 2000s," he added. "High tech products, highly exported products, and metals are growing and cushioning the decline in industrial activity. We believe the manufacturing recession is nearing an end and that modest growth is likely in the second half of the year."

In addition to the motor vehicles and parts industry, other durable manufacturing industries that registered increases included fabricated metal products; computer and electronic products; electrical equipment, appliances, and components; and miscellaneous manufacturing. Decreases were recorded in the indexes for wood products, nonmetallic mineral products, machinery, aerospace and miscellaneous transportation equipment, and furniture.

Among nondurable manufacturing industries, reductions occurred in the indexes for food, apparel and leather, paper, and petroleum and coal products. The production declines in these industries were offset by higher output for textile and product mills, chemicals, and plastics and rubber products.

Capacity utilization at industries grouped by stage of process changed as follows: For the crude stage, utilization moved up 0.2 percentage point, to 89%,; for the primary and semifinished stages, utilization moved down 0.5 percentage point, to 79.3%,; and for the finished stage, utilization decreased 0.1 percentage point, to 75.9%.

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