Operating Rate Unchanged at U.S. Factories in June

WASHINGTON —  America’s factories, mines and utilities operated at 79.7% of capacity in June, up modestly from the operating rate a year earlier, the government reported Thursday.

The Federal Reserve said the operating rate in June was unchanged from a revised rate of 79.7% in May but was 0.7 percentage point higher than in June, 1986.

The index was held back in June by a big cut in production at auto factories as U.S. auto makers struggle to reduce high levels of unsold cars in the face of weak sales.

Analysts said that if the effects of the auto cutbacks are removed, factory operating rates reflect a general rebound in the competitive position of U.S. manufacturers, who are beginning to see export sales climb as the weaker dollar makes American goods cheaper on overseas markets.

“U.S. manufacturers are becoming competitive again in the world marketplace. Exports have been the major source of strength for the economy for the past two quarters,” said David Wyss, an economist with Data Resources Inc. of Lexington, Mass.

Seesaw Pattern

Wyss predicted that economic growth, as measured by the gross national product, would average between 2.5% and 3% for the rest of this year as an upturn in the fortunes of the manufacturing sector offsets weakness in other areas of the U.S. economy.

This forecast is in line with the expectations of the Reagan Administration, which is counting on a declining trade deficit to boost GNP growth to 3.2% this year, up from last year’s sluggish 2.5% rate.

The unchanged operating rate in June followed a 0.3 percentage point rise in May and a 0.2 percentage point decline in April.

The operating rate at manufacturing plants actually edged down 0.1 percentage point last month to 80.1% of capacity, reflecting the cutback at auto plants.

Auto makers operated at 70.8% of capacity in June, down from an operating rate of 73.2% in May and almost 14 percentage points below the February operating level.