Industrial production up 1.6% in October

WASHINGTON — U.S. industrial production rose 1.6% in October as the adverse effects from Hurricane Ida faded and automakers, stung by severe supply chain problems the month before, posted a strong increase.

Production rebounded from a 1.3% plunge in September, the Federal Reserve reported Tuesday. The gain was double what had been expected.

The September weakness reflected severe shortages of semiconductor chips that contributed to a fall in auto production and the lingering impacts of Hurricane Ida which disrupted oil and gas production.

The Fed attributed about half of the October gain to recovery from the effects of Ida, which had come ashore in Louisiana on Aug. 29, triggering widespread shutdowns at refineries and chemical plants.

Industrial output was also helped by an 11% jump in production of motor vehicles and parts, after two months of declines caused by the semiconductor shortage.

Excluding autos and parts, manufacturing output rose 0.6% after a 0.2% decline a month earlier.

In the major industry groups, manufacturing activity rose 1.2% while mining, which includes oil and gas production, surged 4.1% and output at the nation’s utilities was up 1.2%.

Economists cautioned that even with the better-than-expected October gain, overall production in coming months will be weighed down by continuing supply chain bottlenecks.

Andrew Hunter, senior U.S. economist at Capital Economics, said the decision by General Motors to restart all of its North American plants this month pointed to further recovery in auto production, but not a total recovery.

“With many of those factories still running well below capacity, and industry estimates suggesting that the semiconductor shortage will persist, at a minimum until well into next year, we expect auto production will remain weak,” Hunter said.

The Fed reported that output of machinery fell by 1.3% last month with part of that decline attributed to the strike at farm implement manufacturer John Deere.

Categories including consumer goods, business equipment and materials all advanced from the prior month.

Factory production of nondurable goods climbed 1.3% in October, the first advance in three months and driven by petroleum and coal.

Manufacturing capacity utilization, a measure of plant use, rose to 76.7%, the highest since January 2019. Total industrial capacity climbed to 76.4%.