U.S. INDUSTRIAL PRODUCTION UP 0.7%

U.S. FRB - May 14, 2021- Total industrial production increased 0.7 percent in April. The indexes for mining and utilities increased 0.7 percent and 2.6 percent, respectively; the index for manufacturing rose 0.4 percent despite a drop in motor vehicle assemblies that principally resulted from shortages of semiconductors. An important contributor to the gain in factory output was the return to operation of plants that were damaged by February's severe weather in the south central region of the country and had remained offline in March. The weather-induced drop in total industrial production in February and the subsequent rebound in March are now estimated to have been larger than reported last month.

At 106.3 percent of its 2012 average in April, total industrial production has moved up 16.5 percent from its level in April 2020 (the trough of the pandemic), but it was 2.7 percent below its pre-pandemic (February 2020) level. Capacity utilization for the industrial sector rose 0.5 percentage point in April to 74.9 percent, a rate that is 4.7 percentage points below its long-run (1972–2020) average.

Market Groups

Most market groups posted gains in April, with the principal exceptions being those related to motor vehicles and parts. Automotive products, transit equipment, and consumer parts all recorded losses, as shortages of semiconductors held back motor vehicle assemblies. Among the other market groups, chemical materials and consumer energy products posted strong gains of 6.7 percent and 3.8 percent, respectively.

Industry Groups

Manufacturing output rose 0.4 percent in April, with decreases of 0.4 percent and 1.1 percent for durable and other manufacturing (publishing and logging), respectively, outweighed by an increase of 1.3 percent for nondurable manufacturing. The index for motor vehicles and parts fell 4.3 percent; excluding the motor vehicle sector, factory output advanced 0.7 percent, primarily reflecting a further recovery in chemicals as additional factories that had sustained weather-related damage during February reopened. Elsewhere, industry results were mixed, with supply chain difficulties possibly hindering production. Among nondurables, most major industry categories recorded gains, but paper, printing and support, and plastics and rubber products recorded modest losses.

The output of utilities moved up 2.6 percent in April after dropping substantially in March, when unseasonably warm weather reduced demand for heating. Mining production increased 0.7 percent in April; the index fell more than 9 percent in February because of the winter storm and recovered much of that loss in March.

Capacity utilization for manufacturing increased 0.3 percentage point in April to 74.1 percent. The operating rates for mining and utilities rose 0.7 percentage point and 1.7 percentage points, respectively. The rates for all three sectors remained below their long-run averages.

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