A worker wears a mask Monday as he cleans up an area outside an entrance at Boeing Co.'s airplane assembly facility in Everett, Washington, north of Seattle. American industry collapsed in March as the coronavirus pandemic wreaked havoc on the U.S. economy. Manufacturing and overall industrial production posted the biggest drops since the United States demobilized after World War II. Credit: Ted S. Warren | AP

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WASHINGTON — American industry collapsed in March as the pandemic wreaked havoc on the U.S. economy. Manufacturing and overall industrial production posted the biggest declines since the United States demobilized after World War II.

The Federal Reserve reported Wednesday that manufacturing output dropped 6.3 percent last month, led by plunging production at auto factories that have entirely shut down. Overall, industrial production, which includes factories, utilities and mines, plummeted 5.4 percent. The declines were the biggest since 1946 and far worse than what economists had expected.

Production of autos and auto parts went into freefall, dropping 28 percent.

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The lockdowns and travel restrictions imposed to combat COVID-19 have brought economic activity to a near-standstill. Output dropped 3.9 percent at utilities and 2 percent at mines as oil and gas drilling plunged, the Fed said.

Factories were running at 70.2 percent of capacity last month, down from 75.1 percent in February and lowest since 2010 when the U.S. economy was still recovering from the 2007-2009 Great Recession.

“The outlook is bleak for the industrial sectors,” James Watson and Gregory Daco at Oxford Economics wrote in a research note. “With the global coronavirus recession leading to a sudden stop in activity at home and around the world, factory output is likely to fall even further in April. Major supply chain disruptions, reduced energy activity and tighter financial conditions will continue to represent major headwinds in the coming months.”

They say industrial production could drop 15 percent overall.