Factory Operating Rate Edges Up in November

The operating rate at U.S. factories, mines and utilities edged up slightly in November following two consecutive declines, the government said Monday.

The Federal Reserve Board said American industry operated at 80.1% of capacity last month. The 0.2-percentage-point increase made up only part of the ground lost from declines of 0.5 percentage point in October and 0.3 percentage point in September.

Analysts were divided over whether the small increase signaled brighter days ahead for U.S. industry.

John Albertine, an economist and president of the American Business Conference, a coalition of high-growth companies, predicted that the “yo-yo phenomenon which has plagued capacity utilization all year is coming to an end.”

I think we will see capacity utilization bouncing higher each month in 1986.”

He based this optimism on a belief that the dollar has fallen far enough that U.S. manufacturers will start to be competitive again in both domestic and foreign markets.

But Jack Carlson, chief economist for the National Assn. of Realtors, predicted that the operating rate would decline from its current level once businesses restock inventories, especially depleted inventories of cars.

The November improvement was led by a 0.2-percentage-point gain in the manufacturing sector.