Industrial production increased by 1.4% in May

Total industrial production rose 1.4% in May, from April, as many factories resumed at least partial operations following suspensions related to COVID-19 (coronavirus), according to the Federal Reserve.

Meanwhile, the combined value of distributive trade sales and manufacturers’ shipments, adjusted for seasonal and trading-day differences but not for price changes, fell 14.4% to $1.18 trillion in April, from March, and was down 18.4% from April 2019, according to the U.S. Census Bureau.

The Federal Reserve and Census Bureau released Tuesday (June 16) industrial and manufacturing data for May and April, respectively.

In May, total industrial production was down 15.4% from the pre-pandemic level in February, according to the Federal Reserve. Manufacturing output rose 3.8% in May, and most major industries reported increases, with the largest rise posted by motor vehicles and parts. The indexes for mining and utilities fell 6.8% and 2.3%, respectively. The level of total industrial production, which was at 92.6% of its 2012 average, fell 15.3% in May, from the same month in 2019. Capacity use for the industrial sector rose 0.8 percentage points to 64.8% in May, and the rate is 15 percentage points below its long-run (1972-2019) average and 1.9 percentage points below the lowest level in the Great Recession.

The index for consumer goods increased by 3.9% as a result of a rise in automotive products. The production of business equipment increased by 5.8% as a result of a rise in transit equipment with the reopening of factories producing motor vehicles and civilian aircraft. The indexes for defense and equipment, construction supplies and business supplies also rose. The output of materials fell 0.8% as production of energy materials fell amid declines in oil extraction that more than offset a rise in the indexes for durable and nondurable materials.

Manufacturing output was 16.9% below its pre-pandemic level in February. The index for durable manufacturing rose 5.8% in May, with the largest increase among its components in motor vehicles and parts as output rose but remained more than 60% below its February level. Durable goods industries reported increases between 8% and 10%, and this includes nonmetallic mineral products, aerospace and miscellaneous transportation equipment and furniture and related products. The index for nondurables increased 2.1% with increases of about 10% or more for textile and product mills, apparel and leather, printing and support and plastics and rubber products. The output of other manufacturing, including publishing and logging, rose 2.5%.

After falling nearly 28% in April, the index for oil and gas well drilling fell almost 37% in May and was down more than 63% from the same month in 2019. The index for crude oil extraction has fallen about 5% in the past two months.

Capacity use for manufacturing rose 2.2 percentage points to 62.2% in May but was 1.5 percentage points below the lowest level in the Great Recession. The operating rate for durable manufacturing rose 3.1 percentage points to 57.1% but was below its 2009 low. Capacity use for nondurables increased 1.4 percentage points to 68.5%, also less than the 2009 low.

In April, manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, fell 1.3%, from March and were down 2.2% from April 2019, according to the Census Bureau. The total business inventories/sales ratio based on seasonally adjusted data was 1.67 at the end of April. The April 2019 ratio was 1.39.