WASHINGTON (Reuters) – Production at U.S. factories slowed more than expected in August due to disruption from Hurricane Ida and continued shortages of raw materials and labor as the COVID-19 pandemic worsens prolonged.
Manufacturing output rose 0.2% last month, the Federal Reserve said on Wednesday. Data for July has been revised to show an increase in production of 1.6% instead of 1.4% as previously reported.
Economists polled by Reuters predicted that manufacturing output would gain 0.4%.
The commodities crisis has been worsened by the latest wave of infections caused by the Delta variant of the coronavirus, mainly in Southeast Asia, as well as port congestion in China.
General Motors Co said it will cut production at its factories in Indiana, Missouri and Tennessee this month due to a continuing shortage of microchips. Ford Motor Co is also reducing the production of trucks.
Part of the manufacturing slowdown reflects the shift in spending to services from goods due to COVID-19 vaccinations. The manufacturing sector, which accounts for 11.9% of the US economy, remains supported by companies desperate to rebuild their inventories after the sharp drop in inventories in the first half of the year.
(Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci)