Chicago Fed Midwest factory activity up in July

CHICAGO (Reuters) - The Chicago Federal Reserve Bank said on Wednesday its Midwest manufacturing index was higher in July, boosted mostly by a jump in auto production.

The index rose 0.4 percent to a seasonally adjusted 106.3 from 105.9 in June, originally reported at 106.0. It was the second consecutive monthly increase.

Compared with a year earlier, Midwest output was down 2.4 percent, outpacing a 0.9-percent national decline.

Midwest auto sector production rose by 1.5 percent on the heels of a 7.1-percent increase in June. Production is normalizing after the settlement of a crippling strike at parts supplier American Axle in late May.

The nation's auto output rose by 2.0 percent in July. Compared with a year ago, regional automotive output fell by 7.8 percent against a 4.4 percent national decline.

Regional machinery output rose by 0.7 percent in July after falling 0.9 percent in June, and was the only sector to show a year-on-year increase -- just 0.1 percent, far below the 6.8-percent national advance.

Output in the Midwest steel sector fell by 0.9 percent in July, a fifth consecutive monthly decline. Regional steel output was down 3.9 percent on the year while national steel production fell by 1.9 percent.

Resource sector output slipped by 0.2 percent in July on top of June's 0.4 percent decline.

Production of chemicals and minerals rose in July while output of food, paper and wood fell.

Compared with a year earlier, the region's resource output was down 1.4 percent against a 0.9-percent national decline.

The Chicago Fed Midwest Manufacturing Index is a monthly estimate of manufacturing output in the region by major industries. The survey covers the five states that make up the seventh Federal Reserve district: Illinois, Indiana, Iowa, Michigan and Wisconsin.

(Reporting by Ros Krasny; Editing by James Dalgleish)