U.S. factories slow in August due to COVID - 19 shortages

WASHINGTON Reuters - Production in U.S. factories slowed more than anticipated in August amid disruptions from Hurricane Ida and lingering shortages of raw materials and labor as COVID - 19 pandemic drags on

Manufacturing output increased 0.2% last month, the Federal Reserve said on Wednesday. Data for July was revised to show production soaring 1.6% against 1.4% as previously reported.

Economists polled by Reuters had forecast that production would gain 0.4%.

The raw materials crunch is driven by the latest wave of infections caused primarily in Southeast Asia by the Delta variant of the coronavirus, as well as by congestion at ports in China.

General Motors Co said it would cut production in its plants in Indiana, Missouri and Tennessee this month because of an ongoing microchip shortage. Ford Motor Co. is also reducing truck production.

Some of the slowdown in manufacturing reflects the rotation in spending back to services from goods due to COVID - 19 vaccinations. Manufacturing, which accounts for 11.9% of the US economy, remains underpinned by businesses desperate to replenish stocks after inventories were significantly reduced in the first half of the year.