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

(Bloomberg) --

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.

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