According to the latest figures from the US Federal Reserve Board, US industrial production fell 0.7 percent in June, to 142.5 percent of its 1992 average, and second-quarter production was down 5.6 percent at an annual rate.
After nine consecutive months of decline, industrial production in June was more than 3-1/2 percent below its level in June 2000. Manufacturing output, which also posted its ninth consecutive monthly decline, contracted 0.8 percent in June, to more than 4 percent below its year-earlier level.
Mining output weakened 0.4 percent, and utilities production increased 0.9 percent. The rate of capacity utilisation for total industry sank to 77 percent, more than 5 percentage points below its 1967-2000 average.
The output of consumer goods dipped 0.2 percent in June, despite a gain in the production of consumer energy goods. Production of automotive products, which jumped in May, fell back 1.3 percent in June; the level of production was nearly 7 percent below that of June 2000.
Elsewhere among consumer durables, the production of home audio and video equipment, appliances, and household furniture weakened noticeably. The output of nondurable consumer goods was flat. The output of consumer energy products increased 1.7 percent, with sizable gains in the production of automotive gasoline and in utility sales to residences.
The production of nondurable consumer goods excluding energy contracted 0.3 percent, as the production of foods and tobacco and clothing continued to decrease.
The output of business equipment fell 1.4 percent in June. The production of transit equipment dropped back in June; although output in this category rose, on average, in the second quarter, it remained more than 10 percent below its level in June 2000. In June, medium and heavy truck production – the hardest-hit transit industry – was more than 40 percent below its June 2000 level.
The 1.2 percent decline in the production of information-processing equipment reflected, in part, continued losses in the communications equipment industry; the output of computer and office equipment was flat in June. The output of industrial and other equipment fell 1.8 percent, with widespread declines posted within the sector.
Broad-based weakness in the construction supplies industries led to a reduction in the output of intermediate products. The production of business supplies edged up slightly after six consecutive months of decline. The output of materials fell back 0.9 percent in June, and the losses were widespread. Within durable materials industries, noticeable cutbacks were made in the production of both automotive parts and semiconductors. Among nondurable materials, the output of chemicals and of textiles continued to fall. The output of energy materials was flat, with small offsetting changes among the components.
The weakness in manufacturing production in June was widespread across all industries. Overall manufacturing fell 0.8 percent, and both the manufacturing aggregate excluding motor vehicles and parts and the aggregate excluding high-technology industries fell by nearly the same amount.
Overall manufacturing output fell at an annual rate of 5.9 percent in the second quarter, after having dropped 7.9 percent in the first quarter. The weakness in the second quarter was evident among both durables and nondurables. The largest drops were in electrical machinery (most notably semiconductors), textile mill products, industrial machinery and equipment, fabricated metal products, printing and publishing, and chemical products. Only four industries showed advances in output in the second quarter: motor vehicles and parts, lumber and products, paper and products, and petroleum products. The output of motor vehicles and parts increased at an annual rate of 35 percent after having fallen at an average rate of 25 percent in each of the previous two quarters.
The factory operating rate dropped 3/4 of a percentage point to 75.5 percent in June. The utilisation rate for primary-processing industries declined to 75.4 percent, while the rate for advanced-processing industries declined to 76.2 percent.
With the exceptions of stone, clay, and glass products, petroleum products, and miscellaneous manufactures, operating rates for the major manufacturing industries remained below their long-run averages.
Capacity utilisation in high-technology industries (computers, communications equipment, and semiconductors and related electronic components) dropped 2 percentage points in June, to 67.5 percent. The operating rate at utilities picked up slightly to 86.6 percent. The operating rate for mining edged down to 89.1 percent.