Chicago Fed: June Midwest Mfg At 16-Yr Low Despite Auto Bounce

Chicago Fed: June Midwest Mfg At 16-Yr Low Despite Auto Bounce
    By Howard Packowitz    Of DOW JONES NEWSWIRES  

CHICAGO (Dow Jones)--Manufacturing activity in the midwestern U.S. showed little if any signs of recovery last month, based on data released Monday by the Federal Reserve Bank of Chicago.

The Chicago Fed's Midwest Manufacturing Index fell 0.3% in June to a seasonally-adjusted level of 78.1, the lowest reading since September 1993.

Even a boost in output last month in the still-struggling auto sector failed to boost broader manufacturing activity.

The other three categories that make up the index registered monthly declines. All four sectors sustained much sharper reductions compared with the same period a year ago.

The headline index was at an upwardly revised 78.3 in May, from the original estimate of 78.2. Compared to June of last year, the latest index reading was down 25.2%, and 15.4% lower nationwide.

Michigan, which is part of the five-state region, has been severely hit by the depressed auto industry. Auto output rose 1.4% in June to 45.1, bouncing from a May reading that was the lowest in 18 years.

Regional car production was still down 42.6% versus June 2008, while auto output nationwide fell 24.5% for the year.

The sharpest monthly production decline came in the machinery sector. It was down 1.1% in June on a regional basis, a bit better than the 1.3% monthly slide for the entire U.S.

Compared to year-ago levels, Midwest machinery production tumbled 26.3%, while national output was down 18%.

The region's steel sector output was 0.9% lower in June, more severe than the 0.4% national decline, the Chicago Fed reported.

Midwestern steel production plunged 36.8% compared to the same time a year ago. Nationally, steel output was down 25.8% versus June 2008.

The Chicago Fed reported the Midwest's resource sector output slid 0.6% in June, matching the monthly decline nationwide.

"One of the five subsectors of the resource sector - food production - increased from May to June," the Chicago Fed said in a news release.

Chemical, paper, nonmetallic mineral, and wood production edged lower during the month, the Chicago Fed also reported.

Regional resource output dropped 9.5% compared the same time a year ago. Nationally, the annual decline was at 8.3%.

The Chicago Fed compiles the data by calculating the number of hours worked in Michigan, Illinois, Indiana, Iowa, and Wisconsin.

The July manufacturing index is scheduled to be released Aug. 24.

  By Howard Packowitz, Dow Jones Newswires; 312-750-4132; [email protected]  

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(END) Dow Jones Newswires

July 27, 2009 12:00 ET (16:00 GMT)

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