U.S. Manufacturing Output Increased in April for a Second Month

U.S. manufacturing output rose in April by slightly more than expected, suggesting further improvement for factories that are otherwise buffeted by supply shortages and shipping challenges.

Factory output increased by 0.4% in April, following an upwardly revised 3.1% jump in March, Federal Reserve data showed Friday. Total industrial production, which also includes mining and utility output, rose 0.7% in April after a revised 2.4% increase a month earlier.

The median estimate in a Bloomberg survey of economists called for a 0.3% monthly increase in factory production and a 0.9% gain in industrial production.

Production growth in recent months has been constrained by shipping backlogs, hiring challenges and a global shortage of semiconductors. Still, steady business investment, strong consumer demand supported by trillions of dollars in government aid and a reopening economy suggest output will remain firm in coming months.

The Fed’s report showed increased factory output of chemicals, petroleum, primary metals and electrical equipment. Manufacturing capacity utilization, a measure of plant use, climbed to 74.1%, while total industrial capacity increased to 74.9%.

Vehicle Production

Production of motor vehicles decreased 4.3% last month compared with 3.8% gain a month earlier. U.S. automakers have been hit hard by a global chip shortage, in some cases resulting in plant shutdowns and lower output. Excluding autos and parts, manufacturing rose 0.7% after a 3.1% surge.

Utility output rose 2.6% in April as temperatures warmed, while mining output increased 0.7%. Oil and gas well drilling accelerated to a 4.6% gain from 3.1%.

Total industrial production remains about 3% below the pre-pandemic level in February of last year.

A separate report earlier this month from the Institute for Supply Management showed factory activity declined in April from a 37-year high as purchasing managers confronted limited availability of parts and materials.

©2021 Bloomberg L.P.

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