Anastasiia Usoltceva/Adobe Stock
While positive coronavirus cases are on the rise in several parts of the country, industrial production bounced back in May after posting the largest monthly drop in the history of the Federal Reserve’s industrial production index in April.
Despite the slight recovery in May — as automotive manufacturers resumed production May 18 on the heels of a two-month suspension — the May index was down 15.4% compared with its pre-pandemic level in February.
Manufacturing output jumped 3.8% in May after plunging 15.5% and 5.3% in March and April.
Among major industry groups, motor vehicles and parts posted the largest gain. General Motors, Fiat Chrysler and Ford Motor Co. all resumed production after suspending operations in late March.
“The restart of vehicle production at General Motors’ component and assembly plants in North America has gone smoothly thanks to strong teamwork,” General Motors said May 28. “Our comprehensive safety procedures are working well, and our suppliers have done a great job implementing their return-to-work strategies and safety playbooks. We are now in a position to increase production to meet strengthening customer demand and strong dealer demand.”
Industrial capacity utilization jumped by 0.8 percentage point to 64.8% in May, which was 15.0 percentage points below the long-run (1972–2019) average and 1.9 percentage points below its trough during the Great Recession, according to the Fed.
“The major market groups posted broad-based gains in their production indexes in May, but each remained well below its pre-pandemic level. The index for consumer goods rose 3.9 percent, led by a significant rebound for automotive products,” the Fed said.
Business equipment fell 5.8%, “boosted by a substantial increase in transit equipment as most factories producing motor vehicles and civilian aircraft reopened.”
The indexes for mining and utilities, however, fell by 6.8% and 2.3%, respectively.