Harvey sends U.S. industrial production down most in 8 years

Christopher Rugaber, The Associated Press</span>
Published Friday, September 15, 2017 9:44AM EDT

WASHINGTON -- U.S. industrial output plunged 0.9 per cent in August, the most in eight years, mostly because of Hurricane Harvey's damage to the oil refining, plastics and chemicals industries.

The storm, which slammed into the Gulf Coast in Texas and Louisiana late last month, lowered industrial production by about 0.75 percentage point, the Federal Reserve said Friday. That suggests production would have slipped without the hurricane.

The Gulf Coast is home to many of the nation's oil refiners, and petroleum is a key component in the manufacturing of plastics and chemicals.

Manufacturing has picked up since last summer as the dollar has fallen in value, which makes U.S. goods cheaper overseas, boosting exports. Manufacturing production fell 0.3 per cent last month, though the Fed said that without the hurricane, it would have increased roughly 0.5 per cent.

In August, the production of autos, airplanes, steel and other metals rose at a healthy clip. The output of machinery and electrical equipment fell.

Industrial production includes mining and utilities as well as manufacturing. Utility output tumbled 5.5 per cent as milder temperatures on the East Coast reduced air conditioning use.

And mining production fell 0.8 per cent last month as Harvey temporarily shut down the drilling of oil and natural gas and refining operations.

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