Shortage of semiconductors lowers US auto production in June

US auto production fell in June due to a shortage of semiconductors, the Federal Reserve reported.

Globally, the high demand for electronic equipment caused by the Covid-19 pandemic led to a shortage of semiconductor chips for the automotive industry.

Overall, US industrial production increased 0.4% in June after rising 0.7% in May.

On the one hand, manufacturing output was down 0.1% in June as the ongoing shortage of semiconductors contributed to a 6.6% decline in motor vehicle and parts production.

Excluding motor vehicles and parts, factory production increased 0.4 percent.

Motor Vehicle Assemblies (Millions of units, seasonally adjusted annual rate)

On the other hand, the production of public services advanced 2.7%, reflecting a higher demand for air conditioning, since much of the country experienced a heat wave in June.

The mining index increased 1.4 percent.

Shortage of semiconductors

For the second quarter as a whole, total industrial production increased at an annual rate of 5.5 percent.

As for manufacturing production, it increased at an annual rate of 3.7% despite a 22.5% drop for motor vehicles and parts.

Semiconductor manufacturers targeted areas that saw sudden increases in demand in 2020, as did network connectivity.

Thus, when automotive production recovered in the current year, semiconductor production began to be insufficient, given the sector’s low idle capacity.

At 100.1% of its 2017 average, total U.S. industrial production in June was 9.8% higher than its prior year level, but 1.2% below its pre-pandemic level (February 2020).

Capacity utilization for the industrial sector increased 0.3 percentage points in June, to 75.4 percent, a rate that is 4.2 percentage points below its long-term average (1972-2020).

In June, manufacturing production fell 0.1% and was 0.8% below its pre-pandemic level.

The production of durable goods fell 0.2 percent.

In addition to the fall in motor vehicles and spare parts, there were decreases of more than 1.0% in non-metallic mineral products and in electrical equipment, appliances and components.

The production of non-durable goods increased 0.2 percent.


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