US factory production falls as strikes drive 10% plunge in autos
US FACTORY production fell in October by more than expected, largely reflecting a strike-related pullback in activity at automakers and parts suppliers.
Output decreased 0.7 per cent last month, the most in four months, weighed down by a 10 per cent drop in motor-vehicle production, Federal Reserve data showed. Excluding autos, manufacturing rose 0.1 per cent.
Total industrial production, which includes mining and utilities, fell 0.6 per cent.
Starting in September, the United Auto Workers union authorised targeted strikes against the Big Three Detroit automakers, disrupting production at the companies and at their suppliers. The UAW reached tentative agreements with management in late October, laying the groundwork for a rebound in factory output in November.
The annualised rate of car assemblies dropped to 9.22 million units, the least since February 2022.
Output of machinery, primary metals and furniture also declined, while gains in aerospace, computer and electronic products and petroleum helped offset that weakness.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Recent factory surveys have indicated tepid new orders, including the latest Fed poll of New York manufacturers, which also showed growing concerns about the future. Looking ahead, factories will have to continue to weather cooling economic activity abroad, elevated interest rates at home and an uncertain economic outlook.
Thursday’s (Nov 16) figures showed capacity utilisation at factories, a measure of potential output being used, fell to 77.2 per cent, the lowest level of the year. Overall utilisation also declined.
Utility output fell for a second month, while mining production increased.
Meanwhile, the Fed’s index of defence and space equipment jumped 1.7 per cent, to a fresh record high. BLOOMBERG
Share with us your feedback on BT's products and services
