Industrial production falls, so do exports
U.S. industrial production fell in November for the third time in four months, Bloomberg reported. Output in factories, mines and utilities dropped 0.6 percent, which was better than the gloomy forecast of economists, who had predicted industrial production would decline 0.8 percent for November.
Factory output, which accounts for about four-fifths of industrial production, decreased 1.4 percent while motor vehicle and parts production declined 2.8 percent. Production of consumer durable goods, including automobiles, furniture and electronics, decreased 3 percent.
“Manufacturing is getting hit from every direction,” said Joshua Shapiro, chief U.S. economists at Maria Fiorini Ramirez Inc.
Aircraft production was one of the few sectors that experienced in increase in production as work resumed at Boeing Co. following its recent strike. Utility production also increased 1.6 percent in November after an increase in October, and mining output, which includes oil drilling, increased by 2.5 percent.
However, despite increases in specific industrial sectors, overall international demand is cutting into U.S. exports, which dropped for a third straight month to its seven-month low, the Commerce Department said.
“Exports are starting to decline on top of domestic demand having blown up the last couple of months,” Shapiro said.
In response, General Motors Corp. plans to cut 250,000 units of production from its 2009 plan and Honda Motor Co. is cutting 119,000 from its North American production plan.