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Production at U.S. factories increased 0.2% January, rebounding only slightly from a 0.1% decline the month prior, according to data released this week by the Federal Reserve Board. 

For the second month in a row, overall factory output was dragged down by the ongoing global shortage of semiconductors, which caused a 0.9% drop in auto plant production in January, following a 0.4% decrease in December. Excluding motor vehicles, manufacturing increased 0.3% in January. 

The chief economist for the National Association of Manufacturers, Chad Moutray, said manufacturers have been challenged by supply chain bottlenecks, workforce shortages, rising production costs and, more recently, the spread of the omicron variant of COVID-19 in January. 

“Nonetheless, manufacturing capacity utilization inched up from 77.2% in December to 77.3% in January, matching the rate in November, which was the strongest since December 2018,” Moutray said. “Overall, manufacturing production has risen 2.5% year-over-year, with 2.0% growth relative to February 2020’s pre-pandemic pace.” 

Last month’s gain in manufacturing output combined with a record 9.9% jump in utilities to boost industrial production 1.4%, according to the Federal Reserve data. Demand for utilities was boosted by freezing temperatures in many parts of the country in January.