PC Makers Watch Factories' Capacity Use Dwindle

U.S. makers of computers and related equipment continued producing their wares at a lackluster pace last month.

In November, factories producing computers worked at 76.6% of capacity, a mere 0.6% higher than they did in November, according to the Federal Reserve Board. Such rates pale when compared with the output in the booming 1990s, when capacity rates averaged 86%. American computer makers aren't even using as much capacity as they averaged during the last 30 years of the 20th century, when capacity rates approached nearly 80%.

The Fed's industrial production numbers weren't very impressive, either. Industrial production in November rose 0.7% from October and 4.9% from a year earlier. The computer sector's dreary performance, however, did outshine the overall index, which inched ahead 0.1% last month.

"The goods industry is beginning to turn upwards again after suffering a setback in the prior two months, but production is still 5.6% below the June 2000 pre-recession peak," says Daniel Meckstroth, chief economist at the trade group Manufacturers Alliance/MAPI. "Industry needs a reaccelerating general economy and more export opportunities to employ idle capacity and thus stimulate a rebound in capital spending."