Industrial production declined 0.2% in May after having fallen 0.7% in April.
Manufacturing output was unchanged in May, the output of utilities shrank 1.8%, and the output at mines rose 0.1%. Factory output was boosted by a small pickup in the index for motor vehicles and parts.
The end in late May of the strike at a parts producer had little effect on vehicle output for the month; the output of motor vehicles and parts remained about 10% below its February level. Excluding motor vehicles and parts, manufacturing production edged down 0.1% after having decreased 0.5% in April.
At 110.9% of its 2002 average, overall industrial production was 0.1% below its year-earlier level. The rate of capacity utilization for total industry declined 0.2 percentage point, to 79.4%, a level 1.6 percentage points below its average for 1972-2007.
The following is an analysis from Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI, regarding the industrial production report for May:
Industrial production in May 2008 declined 0.2 percent, compounding a severe 0.7 percent drop in April. Manufacturing production was flat in May, after falling 0.9 percent in April. The recession in manufacturing is concentrated in industries supplying the construction sector and the motor vehicles industry. And the downturn is aggravated by the structural losses of textiles and apparel industries in the U.S.
"Despite these negative forces, the manufacturing downturn is not a cave-in like that which occurred in the early 2000s. High tech products, highly exported products, and metals are growing and cushioning the decline in industrial activity. We believe the manufacturing recession is nearing an end and that modest growth is likely in the second half of the year."