Washington, Oct. 16 (Bloomberg) -- Industrial production probably extended its slump to one year in September, as terrorist attacks disrupted shipments and prompted factories to halt assembly lines, analysts said in advance of a report today. A 0.8 percent drop in production at factories, mines and utilities was expected, based on the median of 44 forecasts in a Bloomberg News survey. That would follow a similar decline in August and mark the longest contraction since the making of armaments dwindled in 1944-1945 with the close of World War II. Ford Motor Co. and other manufacturers idled plants last month after heightened security at U.S. borders delayed shipments of parts. The pressure to trim stockpiles has grown since Sept. 11 because the deadly terrorist attacks in New York and Washington have led Americans to cut back on spending. ``It looks like another weak month, in part because of the disruption to supply,'' said Jim O'Sullivan, an economist at UBS Warburg LLC in Stamford, Connecticut. ``Industrial production is probably going to be pretty weak for the next few months as the hit to demand from Sept. 11 feeds back to manufacturing.'' The plant-use rate, which measures industrial capacity in use, probably declined to 75.4 percent last month from 76.2 percent in August, the Bloomberg survey showed. That would be the lowest since 74.8 percent in June 1983. The Federal Reserve releases its manufacturing report at 9:15 a.m. Washington time.
Automakers
Ford, the second-largest automaker, idled plants in Ohio and Michigan last month because of parts shortages. As a result, Ford said production will be 13 percent lower in the third quarter than a year earlier. DaimlerChrysler AG and Honda Motor Co. also shuttered some plants in the U.S. and Canada after the attacks. Boeing Co., the biggest airplane maker, is cutting as many as 30,000 jobs and slashing jetliner production 20 percent next year. Airlines have delayed orders after the attacks, which were carried out with hijacked passenger jets and made Americans reluctant to fly. ``We think it's much more severe'' than the slump that followed the 1991 recession, Boeing Vice Chairman Harry Stonecipher said last week. Ingersoll-Rand Co., the maker of Bobcat loaders and Schlage locks, reported an abrupt decline in orders in the weeks after Sep. 11. Eaton Corp., the second-largest maker of hydraulic equipment, said it expects sales to drop 16 percent this year.
Bethlehem Steel
Some companies already were struggling. Bethlehem Steel Corp., the fifth-largest U.S. steelmaker, reported $4.5 billion in debt, compared with $4.2 billion in assets, and filed for bankruptcy protection. Inexpensive foreign steel and slowing demand have weakened the company. Manufacturing had had been showing some signs of improvement before the destruction of the World Trade Center and damage to the Pentagon, which killed more than 5,000 people. Texas Instruments Inc., whose chips run two-thirds of the world's mobile phones, in August had reported an increase in orders from phone makers, the first signs of a rebound in global demand.