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Factory Use Rate Declines : Utilization Level Off for 5th Time in 6 Months

Associated Press

The operating rate at factories, mines and utilities fell in October for the fifth month out of the past six as U.S. industry continued to slump in the face of stiff foreign competition, the government said Monday.

The Federal Reserve Board said U.S. industry operated at 80.2% of capacity in October, compared to 80.4% in September.

The operating level last month was down nearly 2 percentage points from the high point in this recovery of 82% set in July and August, 1984.

Since that time, U.S. industry has suffered through layoffs and scattered plant closings as domestic producers continued to lose sales to a flood of imports.

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Many economists believe that the slide is not yet over.

“The manufacturing sector has been weak for a year now, and we expect for that to continue for another six to nine months,” said Priscilla Luce, an economist at Wharton Econometrics.

Expects Slow Growth

She said that Wharton is forecasting that the economy will muddle through with growth hovering around 2% through the middle of next year before the falling value of the dollar begins to spur domestic sales once again. By the final three months of 1986, she said, the economy will be growing at a solid clip of 4.7% again.

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“Until the dollar has been down for a while, we are not going to see much pickup in the manufacturing sector,” she said.


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