In September, industrial production fell 1.3% from August, disappointing analysts who expected a small increase of 0.2%.
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Industrial production fell in September in the United States, mainly because of automobile production, which is still suffering from the global shortage of semiconductors, but also from the persistent damage from Hurricane Ida, which hit Louisiana at the end of August.
Industrial production fell 1.3% in September from August, according to data released Monday by the US central bank (Fed), disappointing analysts who expected a small increase of 0.2%.
The three categories of industrial production – manufacturing, mining, and water and electricity – are on the decline.
Thus, manufacturing output fell by 0.7%. Auto production alone plunges 7.2%, “semiconductor shortages continuing to hamper activities,” said the Fed in its press release.
The production of water and electricity utilities also fell 3.6%. Demand for air conditioning, which had been strong in August with temperatures higher than usual, fell sharply in September.
Mining production fell by 2.3%, and “the persistent effects of Hurricane Ida (which affected part of Louisiana at the end of August, Editor’s note) largely explain” this drop, details the Fed.
All categories combined, “about 0.6 percentage point of the decline in total industrial production results from the impact of the hurricane.”
In addition, the data for August have been revised downwards (-0.1% instead of + 0.4% initially announced).
As a result, the industrial capacity utilization rate drops by 1 percentage point, and falls to 75.2%, a rate 4.4 percentage points lower than the average calculated between 1972 and 2020.
Compared with September 2020, on the other hand, industrial production is up 4.6%.
“The impact of Hurricane Ida will inevitably fade, but the constraints on the supply side will be with us for a while,” said Oren Klachkin, economist for Oxford Economics, in a note, referring to “the difficulties logistics ”, but also“ hiring problems and the low available national production capacity ”.
“We expect supply to catch up with demand around mid-2022, but it may take longer to overcome these challenges,” he said, anticipating demand that will remain “robust” next year.
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