Industrial production edged up 0.1 percent in May, the second consecutive month with little or no gain. Manufacturing production rose 0.4 percent after having fallen 0.5 percent in April.
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The output of motor vehicles and parts has been held down in the past two months because of supply chain disruptions following the earthquake in Japan. Excluding motor vehicles and parts, manufacturing output advanced 0.6 percent in May and edged down 0.1 percent in April; the decrease in April in part reflected production lost because of tornadoes in the South at the end of the month.
Outside of manufacturing, the output of mines increased 0.5 percent in May, while the output of utilities fell 2.8 percent. At 93.0 percent of its 2007 average, total industrial production in May was 3.4 percent above its year-earlier level.
Capacity utilization for total industry was flat at 76.7 percent, a rate 3.7 percentage points below its average from 1972 to 2010.
\”The May industrial production report conveys good news about manufacturing activity and should quiet the cacophony of Chicken Littles who mistook the April decline in production (due to the Japanese tsunami impact on autos and electronic and Mississippi flooding) as a sign that a ‘recession was coming’,\” says Daniel J. Meckstroth, Ph.D., chief economist for the Manufacturers Alliance/MAPI. \”It is clear that supply chain problems emanating from Japan are still an issue, motor vehicle production fell again in May, but overall manufacturing is robust.\”
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