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Industrial Production Posted Largest Monthly Drop Ever in April

Total Industrial Production, Manufacturing, Both Post Largest in 101-Year History of Index

Washington, D.C. (PPD) — The Federal Reserve reported industrial production fell 11.2% in April, the largest monthly drop in the 101-year history of the index. It was the direct result of factories slowing or suspending operations to mitigate the spread of the Chinese Coronavirus (COVID-19) throughout the month.

Forecasts for industrial production ranged from a low of -15.0 to a high of -6.2. The consensus forecast was -11.5.

Manufacturing output dropped 13.7%, also the largest decline on record. All major industries posted declines. The output of motor vehicles and parts declined more than 70%, and remaining production in manufacturing fell 10.3%.

Forecasts for manufacturing ranged from a low of -20.0 to a high of -5.0. The consensus forecast was -11.4. The indexes for utilities and mining fell 0.9% and 6.1%, respectively.

At 92.6% of its 2012 average, the level of total industrial production was 15.0% lower in April than it was a year earlier.

Capacity utilization for the industrial sector decreased 8.3% to 64.9% in April, a rate that is 14.9% below its long-run (1972–2019) average and 1.8 percentage points below its all-time (since 1967) low set in 2009.

Forecasts for the Capacity Utilization Rate ranged from a low of 60.0 to a high of 75.7. The consensus forecast was 64.9.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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