Manufacturing production edged down 0.1% in June, pulling back after rising 0.9% in May. Motor vehicles and parts production plummeted 6.6% in June, with the chip shortage and supply chain issues continuing to restrict activity. Excluding motor vehicles, manufacturing production increased 0.2% in June, a disappointing but at least positive reading.

Manufacturing capacity utilization ticked down from 75.4% in May, the highest since January, to 75.3% in June. Since February 2020, output in the manufacturing sector is down 0.8% from pre-pandemic levels. Moving forward, I would expect for manufacturers to be back to pre-pandemic levels in the third quarter, with production rising 6.3% and 3.3% in 2021 and 2022, respectively.