U.S. factory production plummeted in April by the most in records back to 1919 as coronavirus-related shutdowns exacted a bigger toll on the economy.
Output slumped 13.7% from the prior month after a revised 5.5% decrease in March, Federal Reserve data showed Friday.
The median forecast in a Bloomberg survey of economists called for a 14.6% decline. Overall industrial production -- which also includes output at mines and utilities -- dropped 11.2% in April.
Manufacturers in the U.S. were among the first to experience the pandemic’s economic drag as producers fell victim to supply-chain disruptions, a severe weakening in exports market and a drop in domestic demand.
Meanwhile, output fell 0.9% at utilities and decreased 6.1% in mining. Oil and gas well drilling plummeted a record 28% as a collapse in crude prices prompted swift cutbacks in exploration. According to the latest Baker Hughes data, the oil and gas well rig count stood at 374 last week, the lowest in records back to 1974.
The Fed’s report also showed capacity utilization, which measures the amount of a plant in use, slid to 64.9%, the lowest in records back to 1967. At manufacturers alone, utilization dropped to 61.1%, an all-time low in data to 1948.
Motor vehicle production slumped to a 70,000-unit annualized rate, compared with 11 million two months earlier, the Fed said.
The industrial production report traces its roots back to the Woodrow Wilson administration. In 1919, when the nation was transitioning to a peacetime economy after World War I, the Fed began publishing monthly production data for a variety of goods. Three years later, it developed indexes of industrial activity within manufacturing, mining and agriculture.
The Fed said the production indexes were adjusted to account for the output of ventilators at motor vehicle assembly plants. Some car parts manufacturers are making ventilators at previously idled plants, the report said.
Elsewhere, New York State manufacturing remains in distress, with a gauge of May factory activity shrinking at the second-fastest pace in records back to 2001, indicating the economy’s recovery from the pandemic will be slow.
The Federal Reserve Bank of New York’s general business conditions index improved to minus 48.5 from an all-time low of minus 78.2 in March, a report out Friday showed. The bank’s measures of orders, shipments, employment and the average workweek all advanced this month.
Manufacturing has slowed significantly as the coronavirus disrupted global supply chains and caused sharp cutbacks in demand. The May report showed some signs of stabilization, however, as the gauges of employment and shipments jumped by 49.2 points and more than 29 points, respectively.
New York manufacturers grew more sanguine about economic conditions over the next six months, with the regional Fed bank’s future index advancing 22.1 points to 29.1, the highest since July 2019.
The survey responses were collected between May 4 and May 10. Readings below zero indicate contraction, and the median projection in a Bloomberg survey of economists called for the gauge to improve to minus 60. The Empire State report is the first of several regional Fed manufacturing indexes to be released this month.
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