month, led by plunging production at auto
factories that have entirely shut down. Overall,
industrial production, which includes factories,
utilities and mines, plummeted 5.4%. The
declines were the biggest since 1946 and far
worse than what economists had expected.
Production of autos and auto parts went into
freefall, dropping 28%.
The lockdowns and travel restrictions imposed
to combat COVID-19 have brought economic
activity to a near-standstill. Output dropped
3.9% at utilities and 2% at mines as oil and gas
drilling plunged, the Fed said.
Factories were running at 70.2% of capacity
last month, down from 75.1% in February and
lowest since 2010 when the U.S. economy
was still recovering from the 2007-2009
Great Recession.
“The outlook is bleak for the industrial sectors,”
James Watson and Gregory Daco at Oxford
Economics wrote in a research note. “With
the global coronavirus recession leading to a
sudden stop in activity at home and around the
world, factory output is likely to fall even further
in April. Major supply chain disruptions, reduced
energy activity and tighter financial conditions
will continue to represent major headwinds
in the coming months.” They say industrial
production could drop 15% overall.
In another sign that industry is in a full-scale
retreat, the Federal Reserve Bank of New York’s
index for manufacturing in New York state
plummeted an unprecedented 57 points this
month to -78.2, lowest lowest level in records
dating back to 2001.