Even as the new administration rolls out the dough from the stimulus package, offers up an outline to a new financial system rescue and proposes a program to stem the tide of foreclosures, U.S. manufacturers are in the midst of their worst run in decades. So far, industrial production has dropped 13 percent since the current recession started at the end of 2007, marking the largest overall decline in factory output since the recessions of the late 1950s and early 1970s (see chart below).
With broader economic conditions not expected to improve anytime soon, this recession will probably end up being the deepest overall of the postwar era for manufacturers. Worse yet, yesterday's report indicated the national average capacity utilization rate for manufacturing facilities fell to the lowest level ever measured. Considering that this series extends all the way back to 1948, it provides an illustrative benchmark of the amount of productive capacity sitting idle due to the economic downturn.