US industrial production slides more than expected

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Date: Thursday 15 May 2008

LONDON (ShareCast) - US industrial production fell more than expected in April, with production levels affected by a large drop in the output of motor vehicles and parts.

The US Industrial Production Index fell 0.7% in April after a downwards revised 0.2% increase in March. Economists had been forecasting a 0.3% April decline.

Plant capacity use also fell, to 79.7%, versus expectation of 80.1%. Plant capacity use in March was 80.4%.

Production of cars and car parts slumped 7.8% in April, while business equipment production dived 1.1%. Strikes and strike-related shortages had an adverse impact on vehicle and related production, the Federal Reserve said.

The United Auto Workers union staged a walkout at American Axle & Manufacturing Holdings on February 26 which cut output at General Motors by 230,000 vehicles in April.

Excluding vehicle and vehicle parts production, manufacturing production fell 0.4% in April after rising 0.3% in March.

Durable manufacturing fell 1.4%, while non-durable manufacturing dipped 0.1%. Mining output, which includes oil drilling, dropped 0.8% after rising 1% in March.

Natural gas utilities declined 0.3% but electric utilities rose 0.4%.

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