WASHINGTON, July 15 — A shortage of semiconductors hampered US auto production in June, contributing to worse-than-expected factory output, the Federal Reserve reported today.
Industrial production rose 0.4 per cent last month, weaker than economists projected and a slowdown from the 0.7 per cent growth seen in May, according to the Fed data.
Manufacturing fell 0.1 per cent due to the shortage of the computer chips that are used across industries, and which caused automakers to idle factories in recent months.
“Growth clearly has moderated from initial surge last spring, but autos aren’t the only sector struggling with tight supplies of key inputs,” Ian Shepherdson of Pantheon Macroeconomics said.
The data showed industries including nonmetallic mineral products as well as electrical equipment, appliances and components saw production fall more than one per cent last month.
But the auto industry was among the hardest hit, and motor vehicle and parts output dropped 6.6 per cent. Excluding that sector, manufacturing rose 0.4 per cent.
Mining rose 1.4 per cent, while utilities output gained 2.7 per cent, which the Fed attributed to increased use of air conditioning as summer arrived.
US factories are recovering from the Covid-19 pandemic, and June industrial production was 9.8 per cent above the level in June 2020.
However, total output remains 1.2 per cent below February 2020, before the virus caused business restrictions nationwide.
Shepherdson said outside the shortage-plagued auto sector, other manufacturers have seen output rise at a “modest pace.” — AFP
