Gm Strike Blamed For Drop In Output

The General Motors strike caused a 0.5 percent drop in U.S. industrial output in March, but discounting the walkout’s broad impact, production grew 0.3 percent.

“Excluding GM, the manufacturing sector is holding its own and will experience improving conditions by summer,” contended Mark M. Zandi, an economist with Regional Financial Associates in West Chester, Pa.

The seasonally adjusted decline reported Tuesday by the Federal Reserve was the second in three months attributed to special factors.

Output at the nation’s factories, mines and utilities slipped 0.3 percent in January because of the blizzard that froze much of the Eastern part of the country.

Production heated up as the weather moderated a month later, jumping 1.3 percent.

But growth stalled in March when 2,700 autoworkers went on strike at two GM factories, causing a parts shortage that eventually closed 26 of its 29 North American plants. In addition, the walkout halted work at many of the automaker’s independent suppliers.

As a result, overall output posted the steepest decline since a similar 0.5 percent drop last October.