US: Industrial production increases by 1.1% monthly in April

In April, total industrial production increased by 1.1% and manufacturing output by 0.8%. Total industrial production in April was 6.4% higher than the previous year. Capacity utilization rose to 79%, 0.5 percentage points below its long-term (1972-2021) average and close to a 10-year high.

If we look at the sub-items; An increase of 3.9% is observed in the production of motor vehicles and parts. Despite the shortage of supply, vehicle production seems to have progressed. Production typically drops in April, but automakers are trying to make up for lost sales and accordingly production momentum is strong. Excluding the 3.9% increase in the production of motor vehicles and components, factory output increased by 0.5%. The increase in utilities in April reflected increases of 2.1% and 4.4% for electricity utilities and natural gas utilities, respectively. Mining activity increased by 1.6%, in line with the increase in previous months as producers sought to capture higher output prices. In April, the mining index is 8.6% above the previous year’s level, but still 3.8% below the pre-pandemic (February 2020) level.

While industrial production gained above expectations in April, the balance between the softer demand axis and intensifying bottlenecks will be decisive in forward-looking indicators. In a sign that factory activity has shifted into a lower gear, ISM new orders and production indicators in the March and April reports were the weakest since the spring 2020 lockdowns. Accordingly, production output may be reduced to a moderate level in the future.

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