More factories fall silent as capacity use rate hits an all-time low

The Federal Reserve reports that, following a 1.7 percent decline in March, industrial production fell a further 0.5 percent in April. Production in manufacturing fell 0.3 percent, putting it 16 percent below its recent peak at the end of 2007. And the capacity utilization rate for industry fell to 69.1 percent, the lowest reading since statistics began to be collected in 1967.

On one level, this industrial decline isn't all that surprising. For years, commentators and analysts, pundits and politicians have repeated the refrain that manufacturing jobs are being outsourced to other countries. Sometimes their tones have been eager, as if this is represents the United States' next evolutionary step toward an economy that runs on nothing more than brain waves. Other times, the tones have been terrified, as if the image of Chinese workers sewing track suits is a bona-fide, Revelations-endorsed sign of the end times.

If you live in New York, you might be forgiven for thinking that the movement of manufacturing jobs is a done deal. After all, in this city, condominiums in former factories are going for a premium price, and it takes some serious searching to find a factory that still actually makes things. The names remain: there is still a neighborhood named Steinway, and Brooklyn's Domino Sugar building still has a nice big sign. The "garment district" still has offices for all the big clothing companies; after all, even if the clothes come from China, the designs are still made here.

But the city whose industrial might once helped power the world now seems to produce little more than boutique foodstuffs and snazzy financial instruments. For that matter, it's not as if the city that never sleeps is all that unique in this matter. Former industrial powerhouses like Buffalo and Pittsburgh, Detroit and Cleveland, Cincinnati and Chicago all seem to be in the middle of the same mid-life crisis. Across the country, factories stand empty, waiting to become apartments, shooting galleries, or wrecks.

However, even in the midst of this industrial decline, with super-cheap labor and lax regulation making China and Mexico so attractive to industry, America is still producing things. And, while the recession and attendant drop in consumer spending probably isn't hitting the United States as hard as it will hit Asia, it is certainly hurting. What's worse, while stimulus spending might offer the hope of new jobs, most of those jobs won't be in manufacturing. With any luck, improved infrastructure will open the door to further industrial growth. However, for the time being at least, it looks like more and more factories will be transforming into artists' lofts and empty wrecks.
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