Vehicle Production Drops Again As Automakers Face Chip Shortages

Semiconductor chip shortages continue to plague the automotive industry as factory production in the U.S. dipped for the third time in five months.

Manufacturing production was down 0.1% for the month as chip disruptions challenged auto manufacturers, the Federal Reserve reported on Thursday.

However, total industrial production was up, with increases in utilities (2.7%) and mining (1.4%). Industrial output is up 9.8% from last year, the Fed said.

Utility production fared well as temperatures increased and a heatwave swept across most of the nation, while oil and gas production spurred mining efforts in the U.S.

The continual chip shortage has delayed vehicle production, causing plant shutdowns and layoffs across U.S. automakers. The Federal Reserve said that the production of cars, trucks, and auto parts dipped 6.6% for the month of June.

Excluding autos, industrial production actually increased 0.4% for the month, according to the agency.

According to a survey from Bloomberg, economists had called for a 0.3% gain in factory output and a 0.6% industrial production increase for June.