US Manufacturing Output Drops in October Due to Auto Strikes

The United Auto Workers (UAW) union’s strikes against Detroit’s “Big Three” automakers caused a higher than anticipated decline in production at U.S. plants in October, but manufacturing overseas held steady.

Last month’s manufacturing output decreased by 0.7%, the Federal Reserve reported on Thursday. September factory production increased by 0.2%, as opposed to the previously reported 0.4%, according to revised data. According to Reuters polled economists, manufacturing production was expected to decline by 0.3%.

In October, factory production fell 1.7% compared to the same month last year.

The output of motor vehicles and parts fell 10.0%, following a 0.5% decline in September. At American plants controlled by Stellantis, the parent company of General Motors, Ford, and Chrysler, the UAW has ceased its work stoppage.

With autos and parts excluded, manufacturing output increased by 0.1%. Higher borrowing prices have hurt manufacturing, which makes up 11.1% of the economy; in the third quarter, company spending on equipment fell.

Primary metal production, along with that of furniture and related goods, declined last month. However, when the manufacture of electrical appliances, components, and computer and electronic goods increased, so did their production.

September’s mining output was steady, but increased by 0.4%. Production of utilities decreased 1.6%, following a 0.6% decline the month before.

After barely increasing by 0.1% in September, overall industrial production fell by 0.6% in October.

The industrial sector’s capacity utilization, which gauges how efficiently businesses are utilizing their resources, dropped six tenths of a percentage point to 78.9% in October. Its current average from 1972 to 2022 is eight tenths of a percentage point lower.

The manufacturing sector’s operating rate decreased to 77.2% from 77.8% in the previous month, which is one percentage point less than its long-term average.