Following two consecutive months of declines, the output of U.S. factories increased six-tenths of a percentage point in May, the Federal Reserve Board reported on June 15. Its manufacturing production index now stands at 121.0 (1997=100). Capacity utilization in manufacturing increased as well, rising to 78.2% in May from 77.9% in April.
"After rising energy prices created some general uneasiness earlier in the year, manufacturing orders began to pick up again in March and April as energy prices subsided," notes David Huether, chief economist at the National Association of Manufacturers, Washington, D.C. "Now we are seeing production picking up to meet that demand."
In May, overall U.S. industrial production, which includes mining and utilities as well as manufacturing, increased four-tenths of a percentage point to 118.6. Industrial production had fallen three-tenths of percentage point in April.
Capacity utilization for all of U.S. industry, a category that combines manufacturing, mining and utilities, rose to 79.4% in May from 79.1% in April.