U.S. factory output dropped in March by the most since 1946 as a rolling wave of shutdowns related to the coronavirus crippled the manufacturing sector.
Production slumped 6.3% from the prior month followed a 0.1% decrease in February, Federal Reserve data showed Wednesday. The median forecast in a Bloomberg survey of economists called for a 4.1% decline. Overall industrial production -- which also includes output at mines and utilities -- also declined by the most since 1946.
Motor vehicle production slumped 28%, the most since January 2009, while output of machinery dropped 5.6%. Mining production fell 2% as a plunge in oil prices curtailed drilling. Utility output decreased 3.9%.
Capacity utilization, which measures the amount of a plant in use, slid to 72.7%, the lowest level since April 2010.
Factories were among the first in the U.S. to see the economic drag from the coronavirus as manufacturers experienced both supply-chain disruptions and a collapse in demand.
The Fed adjusted the data and how it’s gathered because of the effect of coronavirus closures, making tweaks the same way it would for a hurricane or other extreme weather event. For example, researchers compiled the start dates of stay-at-home orders, assumed essential industries remained open, and used other government data to pinpoint what share of output was impacted by those orders to the county level.
This article was provided by Bloomberg News.