Competition among smartphone providers is driving demand for more advanced parts and improvement in the machines that make them, Chief Executive Officer Mike Splinter said at a July 8 analyst briefing in San Francisco.
The Fed’s report today also showed motor vehicle production rose 1.3% in June following a 0.5% increase the month before. Factory output excluding production of vehicles and parts advanced 0.2% for a second month.
The automobile industry has been a bright spot for the economy, with the vehicle sales rate surging to 15.9 million in June, its best monthly pace since November 2007, according to data from Ward’s Automotive Group.
Utility production dropped 0.1% in June after falling 2.8% the previous month.
Projected industrial natural gas usage is expected to increase by 2.2% this year, according to a short-term energy outlook from the U.S. Energy Information Administration, reflecting economic gains and continued, historically low prices for the commodity that have helped support the manufacturing industry.
Assembly lines turned out 0.5% more consumer goods in June and 0.5% more business equipment.
Capacity utilization, a measure of efficiency, climbed to 77.8% from 77.7% the month before, today’s Fed report showed.
Mining output, which includes oil drillings, increased 0.8% after climbing 0.4% in May.
A regional report yesterday showed manufacturing extended gains into July. The Federal Reserve Bank of New York’s general economic index climbed to 9.5, the highest since February, from 7.8 in June. Readings greater than zero signal expansion in the index, which covers New York, northern New Jersey and southern Connecticut.
Slower-growing foreign markets may still temporarily crimp export-related activity at U.S. factories. The International Monetary Fund projects China’s growth will be 7.8% in 2013, down from an 8% April forecast, and the 17-country euro area will shrink 0.6% as the economies of France, Italy and Spain contract.
Alcoa Inc., the largest U.S. aluminum producer, reported second-quarter adjusted earnings that beat analysts’ estimates after a better-than-expected performance at its unit that supplies components to aerospace and power companies.
The New York-based company expects “continued pressure on prices and demand in North American industrial products and European industrial products,” while auto demand is expected to remain strong, chief financial officer William Oplinger said in a July 8 conference call. “The economy in general is recovering slowly, with different speeds in Europe as well as in the U.S.”