ICS Magazine

Industrial Production Falls 0.5 Percent

May 15, 2003
WASHINGTON (Reuters) - U.S. industrial production fell for a second straight month in April, according to a Federal Reserve report released on Thursday, as American factories operated at their slowest pace since Ronald Reagan was in the White House.

The Fed said output at the nation's manufacturing plants, mines and utilities slid by 0.5 percent, the same as in March. Capacity utilization fell to 74.4 percent from 74.8 percent.

U.S. factories ran at an even slower pace, only 72.5 percent of capacity, the lowest reading since May 1983, when it was also 72.5 percent.

Wall Street analysts had projected a slightly smaller drop in output of 0.4 percent and a capacity use reading of 74.4 percent. The report underscored the weakness in the factory sector, which has been hard hit by the slumping economy.

Overall factory output fell 0.6 percent in April, a third straight decline and the biggest monthly drop since December 2002.

Factory output, which makes up more than four-fifths of overall industrial output, was again held in check by slumping auto production.

Assembly rates for motor vehicles fell to 11.55 million annually from March's 11.90 million rate and auto and auto parts production was down by 2.0 percent in April.

However, factory output of high-tech equipment like computers, semiconductors and communications gear, advanced at a healthy 1.0 percent clip and was up 9.3 percent compared to April 2002 levels.

The other industries tracked in the report, mining and utilities, also posted gains. Mining output rose 0.4 percent while utilities production rose 0.1 percent.