As Covid-19 vaccinations continue to roll out across the U.S., many industries are beginning to resume normal levels of production. Now, a new report from the Federal Reserve shows that overall industrial production has been continuing to climb back up as the economy recovers.
On Tuesday of last week, the Federal Reserve announced that American factory output rose by 0.9% during the month of May. Additionally, overall industrial production rose by 0.8% from April. This marks the 12th straight month in a row in which manufacturing activity increased, according to the Institute for Supply Management.
Much of the gains were due to the massive increase from the auto industry. The production of cars, trucks and auto parts rose by 6.7% in May, signaling a massive consumer demand for new vehicles. This increase was also in spite of the ongoing semiconductor shortage, which has been severely impacting many auto manufacturers. Several companies have had to limit or temporarily halt production in order to maintain an adequate supply of chips.
In addition to the auto sector, activity at mines rose by 1.2%. Utilities also saw an increase, albeit a minor one, at 0.2%.
These gains signal that the American manufacturing sector is continuing to rebound after the initial shocks caused by the Covid-19 pandemic last year. Many manufacturers had to deal with tightened supply lines, as well as a limited workforce due to Covid-19 sicknesses and quarantine protocols. Thanks to the rapid deployment of Covid-19 vaccines, many manufacturers have been able to reopen and staff their facilities in ways that are much closer to pre-pandemic levels.
Interestingly, these gains also come despite the ongoing labor shortage that manufactures have had to grapple with for years. Ultimately, these findings show that the gains could be even greater if a solution to the shortage is found.