US industrial output falls amid supply issues

WASHINGTON (AP) — US industrial production fell 0.1 per cent in December, the first decline since September, with manufacturers still struggling with snarled supply chains.

Many economists had expected a small increase in production last month as factories recovered.

Yet manufacturing output actually fell by 0.3 per cent, with output at auto plants down 1.3 per cent. Automakers have been hurt by supply chain problems, especially shortages of crucial computer chips.

Output from utilities fell 1.5 per cent last month, reflecting unusually warm December weather. Output from mining, which covers oil and gas production, was the only major category showing an increase, a gain of 2 per cent last month.

Economists believe that industrial production will continue to struggle to meet strong demand as long as problems affecting supply chains persist. There is concern that the surge in COVID-19 cases because of the omicron variant will result in shortages of factory workers, which could intensify supply chain problems.