WASHINGTON — Industrial output plunged in April as factories making everything from autos to heavy machinery felt the adverse effects of the weak economy. Analysts held out hope that production will revive in the second half of the year, helped by the government’s economic-stimulus checks.
Industrial production drop ped 0.7 percent last month, the Federal Reserve reported Thursday, more than double the expected decline.
Manufacturing output dropped 0.8 percent, with half of that weakness coming from cutbacks in auto production. Automakers have struggled with falling demand for new cars and production cutbacks caused by a strike at a parts supplier for General Motors.
The decline in overall production matched a 0.7 percent decrease in February and followed a 0.2 percent increase in March. The nation’s industrial sector has been feeling the impact of the slowdown in the rest of the economy, and economists predicted that would continue as weak consumer demand results in rising levels of unsold goods, causing more production cutbacks.
Brian Bethune, an economist at Global Insight, said production will shrink for the third straight quarter, the longest stretch of weakness in manufacturing since the last recession in 2001.
Bethune predicted a mild rebound when consumers spend stimulus checks this summer.
“That extra cash is expected to roll gradually into consumer spending by June,” he said, calling the timing “indeed fortuitous.”
