WASHINGTON — American industry rebounded last month as factories began to reopen for the first time since being shut down by the coronavirus in Aprll.
The Federal Reserve said today that industrial production — including output at factories, mines and utilities — rose 1.4% in May after plummeting a record 12.4% in April and 4.6% in March. Manufacturing output rose 3.8% last month as auto plants began to ramp back up; but production of cars and auto parts remained 62.8% below its May 2019 level.
Output at mines fell 6.8% last month, pulled down by a 37% drop in oil and gas drilling. Utility production fell 2.3%.
The lockdowns and travel restrictions imposed to combat COVID-19 brought economic activity to a near-standstill in March and April. Now there are signs of life as states ease restrictions on business.
Economists Oren Klachkin and Gregroy Daco of Oxford Economics warn that industry’s comeback is likely to be slow.
“Weak demand, supply chain disruptions, historically low oil prices, and heightened economic and virus-related uncertainty will constrain industrial momentum in the coming months,” they wrote in a research report. “The recovery will likely be two-phased: a short-lived, partial snap-back in output, followed by a sluggish and extended rebound.”