WASHINGTON (Reuters) – Production at US factories slowed more than expected in August amid disruptions from Hurricane Ida and persistent shortages of raw materials and labor as drags the COVID-19 pandemic.
Manufacturing output rose 0.2 percent last month, the Federal Reserve said Wednesday. July data were revised to show that production increased 1.6% instead of 1.4%, as previously reported.
Economists surveyed by Reuters had predicted that manufacturing output would gain 0.4%.
The commodity crisis has been exacerbated by the latest wave of infections caused by the Delta variant of the coronavirus, mainly in Southeast Asia, as well as congestion in Chinese ports.
General Motors Co. said it would reduce production at its Indiana, Missouri and Tennessee plants this month due to the continuing shortage of microchips. Ford Motor Co. is also reducing truck production.
Part of the manufacturing slowdown reflects the rotation of spending on goods services due to COVID-19 vaccines. Manufacturing, which accounts for 11.9% of the U.S. economy, remains the basis for companies desperate to replenish stocks after inventories plummeted in the first half of the year.
(Report by Lucia Mutikani; Edited by Paul Simao and Andrea Ricci)