Washington — US factory production fell last month as a shortage of computer chips disrupted car production.
Manufacturing production fell 0.1% in June — the third drop in five months, the Federal Reserve Board reported Thursday.
Overall, industrial production, including production in factories, mines and utilities, increased 0.4% last month after a 0.7% increase in May. Industrial output increased by 9.8% year-on-year.
Stephen Stanley, Chief Economist at Amherst Pierpont Securities, said: “The most notable example is the struggle by automakers to manage chip shortages.”
Utility output rose 2.7% in June as Americans turned on air conditioners to fight heat waves in most parts of the country. Mining production increased by 1.4% due to increased oil and gas production.
Despite the shortage of workers and the difficulty of getting supplies in time, American industry is booming as the threat of the coronavirus recedes. The Supply Chain Management Association, an association of purchasing managers, reported last month that manufacturing was down slightly compared to May. However, more than 50 still came in at 60.6 on a growth scale. Still, factory employment has shrunk, ISM found. This is primarily due to manufacturers struggling to fill jobs as the economy recovers at an unexpected rate due to the coronavirus recession.
Chip shortages reduced production of cars, trucks and auto parts by 6.6%
Source link Chip shortages reduced production of cars, trucks and auto parts by 6.6%