US industrial output declined for the fourth time in the past five months, depressed by warm weather and a halt in Boeing’s production of the 737 Max.
Industrial production, a gauge of output from factories, mines and utilities, fell 0.3 per cent in January from the previous month, the Federal Reserve said on Friday. That was slightly worse than economists’ expectations for a 0.2 per cent decline, according to a Reuters survey of economists.
Manufacturing output was depressed by the halt in Boeing’s 737 Max production as the company continues to face a regulatory review that has kept the jets grounded following two fatal crashes. Excluding the production of aircraft and parts, factory output advanced 0.3 per cent.
US manufacturing has shown signs of recovery following a hit last year amid the US-China trade spat. The signing of the phase one trade truce was expected to provide the manufacturing sector some relief, however the ongoing crisis at Boeing could pose a fresh challenge. The company has said it expects the 737 Max to return to service by mid-2020, but it could still take up to two years before all the aircraft are delivered to customers or returned to service.
Friday’s report also showed manufacturing declined for the first time in three months, slipping 0.1 per cent as warmer weather weighed on energy demand. Output from utilities declined 4 per cent, and mining output rose 1.2 per cent.
