U.S. Industrial Production Increased 0.7% in April
By Xavier Fontdegloria
Industrial production in the U.S. expanded in April amid strong
demand for goods, but the sector continued to be constrained by
severe bottlenecks across the supply chain.
Industrial production, a measure of factory, mining and utility
output, rose at a seasonally adjusted 0.7% in April compared with
March, the Federal Reserve said Friday. This is broadly in line
with forecasts from economists surveyed by The Wall Street Journal,
who expected a 0.8% rise.
The reading marks a slowdown in industrial production's growth
pace compared with March, when output rose by an upwardly revised
Manufacturing output--the biggest component of industrial
production--increased by 0.4% in April from the prior month. Motor
vehicle and parts production acted as a meaningful drag, falling by
4.3% on month, as the global shortage of semiconductor chips has
led to many plants to run at less than full capacity.
Excluding the motor vehicle sector, factory output advanced
0.7%, primarily reflecting a further recovery in chemicals as
additional factories that had sustained weather-related damage
during February reopened, the Fed said.
"Elsewhere, industry results were mixed, with supply chain
difficulties possibly hindering production," the report said.
The U.S. industrial sector's outlook is bright amid strong
demand for goods due to the reopening of the economy and consumers'
spending push, but supply shortages are restricting output and
these strains aren't likely to fade soon, economists say.
Industrial production in April was 16.5% above the same month a
year earlier, the data showed. The surge is partly due to the
comparison with exceptionally low readings in April 2020, when the
pandemic hit the country and factories closed. Production was 2.7%
below its pre-pandemic levels.
Utilities output rose 2.6% in April after dropping substantially
in March, when unseasonably warm weather reduced demand for
heating. Mining output increased 0.7% in April, the Fed said.
Capacity utilization, which reflects how much industries are
producing compared with what they could potentially produce,
increased to 74.9% in April. Economists expected a 74.9% reading.
Capacity utilization for manufacturing rose by 0.3 percentage point
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
May 14, 2021 09:45 ET (13:45 GMT)
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