U.S. Industry Output Dips in September : 0.1% Decline is 2nd in Three Months as Slump Continues

Output at the nation’s factories, mines and utilities slipped 0.1% in September for the second decline in three months, and analysts say the drop is further evidence that the manufacturing sector has yet to pull out of its slump.

Today’s Federal Reserve Board report said industrial output declined after a sharp 0.6% August increase, the biggest gain in more than a year.

Production had declined 0.2% in July. That decline, coupled with the September drop, served to emphasize that the nation’s manufacturing sector has yet to enjoy much relief from import competition.

The September decline left production only 1.1% above where it was a year ago. That compares to a 6.8% rise in production for all of 1984.

The weakness this year has been blamed on a flood of imports that has robbed U.S. manufacturers of sales. Foreign competition, aided by the strength of the dollar, has led to growing demands in Congress for the erection of trade barriers.

Drop in Consumer Goods

The new report showed that industrial production was held back in September by declines in the manufacture of consumer goods and business equipment. Setbacks in these areas offset gains in production of defense and space equipment, construction supplies and basic materials.

Output of consumer goods dropped 0.3% in September, reflecting a decline in production of durable goods, items expected to last three or more years.

Production of new cars and automotive products was down 2.1% after sharp gains in July and August. In September, autos were assembled at an annual rate of 8.1 million units, compared to a rate of 8.3 million units in August.

Production of appliances and other products for the home dropped to a level more than 5% below a year ago.

Production of construction supplies, however, rose for the seventh consecutive month, posting a 0.2% gain, while output of defense and space equipment was up an even sharper 1%.