(Washington) The unprecedented strike at the three major American manufacturers caused overall industrial production to decline by 0.6% in the United States in October compared to September, according to data published Thursday by the American central bank (Fed ).
Manufacturing production alone thus fell by 0.7%, of which “a large part” is “due to a 10% drop in the production of motor vehicles and their spare parts, affected by strikes by several large vehicle manufacturers automobiles,” the Fed said.
The three American automobile giants – Ford, General Motors and Stellantis, parent company of Chrysler – have in fact experienced an unprecedented six-week strike which began at the end of September.
Excluding the automotive sector, manufacturing production recorded a slight increase of 0.1%.
The other two production categories are moving in opposite directions, with utility production — water, gas, electricity — falling 1.6%, while mining production increased 0.4%.
Overall industrial production is also 0.7% lower than its October 2022 level.
The industrial capacity utilization rate fell by 0.6 percentage points, falling to 78.9%, 0.8 percentage points lower than its long-term average (between 1972 and 2022).
The strike-related effects “will likely reverse in November,” commented Rubeela Farooqi, chief economist for HFE, in a note.
However, she explains, “the prospects for industrial production are not clear. Higher borrowing costs and lower demand for goods pose hurdles for the manufacturing sector.”
“However, a stabilization of demand at lower levels, combined with the relocation of supply networks and infrastructure spending, could support factory activity in the coming months,” adds the economist.
