US factory production rebounds at fastest pace in 4 months
<p><br/></p><p>U.S. factory production in July posted the strongest gain in 4 months, reflecting a surge in production at auto plants that are still wrestling with major supply chain problems.</p><p><br/></p><p>Manufacturing output increased 1.4% last month following a decline of 0.3% in June, the Federal Reserve reported Tuesday. It was the best showing since a 3.4% gain in March.</p><p><br/></p><p>Overall, industrial production ¨C which includes manufacturing, utilities and mining ¨C posted a 0.9% increase, the best performance since a 2.8% surge in March.</p><p><br/></p><p>The mining sector, which includes oil and gas production, rose 1.2% as producers continued to ramp up production in response to rising prices for crude oil. Output in the utility sector fell 2.1% in July, as near record-high temperatures in the West were offset by cooler temperatures in other parts of the country.</p><p><br/></p><p>About half of the 1.4% gain in manufacturing output came from a 11.2% rise in the productions of motor vehicles and parts, reflecting the fact that many auto plants trimmed or canceled their typical shutdowns in July for retooling.</p><p><br/></p><p>The Fed reported that auto production continues to be constrained by a persistent shortage of computer chips.</p><p><br/></p><p>While the gain in factory output in July was double what had been expected, many economists said that output in coming months will likely moderate given the on-going problems with supply chains and labor shortages.</p><p><br/></p><p>¡°With many sectors still suffering from severe shortages of raw materials and workers, we suspect growth will slow again over the coming months,¡± said Andrew Hunger, senior US. economist at Capital Economics.</p><p>With the 0.9% gain in July, overall industrial production is now 6.6% above its July 2020 level but still 0.2% below its February 2020 pre-pandemic peak. However, the manufacturing sector is now 0.8% above its pre-pandemic peak.</p><p><br/></p><p>Industries operated at 76.1% of capacity in July, up from 75.4% of capacity in June.</p><p>In addition to the strong gain in auto and parts production, machinery output was up 1.9% in July, computers and electronics showed a 1.1% gain and aircraft production rose 1.9%.</p><p><br/></p>
24 Aug,2021
