US Industrial Production Recovered to Pre-Pandemic Levels in August

09/15/2021 | 07:44am

By Xavier Fontdegloria

Industrial production in the U.S. rose in August, reaching pre-pandemic levels, although persistent supply constraints and shutdowns related to hurricane Ida weighed on activity in some sectors.

Industrial production--which includes factory, mining and utility output--rose at a seasonally adjusted 0.4% in August compared with the previous month, according to data from the Federal Reserve released Wednesday.

The reading broadly matches forecasts from economists polled by The Wall Street Journal, who expected a 0.5% rise. Factory output lost some momentum in August compared with July, when it rose by a revised 0.8%.

Manufacturing output--the biggest component of industrial production--rose by 0.2% in August on month.

Late-month shutdowns related to hurricane Ida held down the gain in industrial production by an estimated 0.3 percentage points as it forced plant closures for petrochemicals, plastic resins and petroleum refining, the Fed said.

U.S. factory activity keeps rising, but there is growing evidence that problems related to procuring components and raw materials are constraining output, particularly in the auto sector. In August, motor vehicle and parts production increased by 0.1% on month amid the shortage of semiconductors.

These supply-chain shortages aren't expected to clear soon as Covid-19 is still causing disruptions in many parts of the global economy. However, production in the U.S. should continue humming in the months to come as inventories remain exceptionally lean, economists from Wells Fargo said in a note.

Utilities output increased 3.3% in August as warm temperatures boosted demand for air conditioning. Mining output dropped 0.6%, reflecting hurricane-related disruptions to oil and gas extraction in the Gulf of Mexico, the Fed said.

Industrial production in August was 5.9% above the same month a year earlier, and exceeded its pre-pandemic level for the first time, by a slight 0.3%.

Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, increased to 76.4% in August, matching economists expectations.

Write to Xavier Fontdegloria at

Corrections & Amplifications

This article was corrected at 10:05 a.m. ET because the original incorrectly said production of motor vehicle and parts fell 4.9% on month. In August, motor vehicle and parts production increased by 0.1% on month.

(END) Dow Jones Newswires

09-15-21 0944ET

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