US Industrial Production Falls 0.6% in March

Industrial output in the United States declined 0.6 percent in March of 2016 from the previous month, following an upwardly revised 0.6 percent drop in February. Figures came worse than market expectations of a 0.1 percent decrease, as mining shrank the most since September of 2008 when production was curtailed because of hurricanes and utilities and manufacturing also fell. For the first quarter as a whole, industrial production shrank at an annual rate of 2.2 percent.

A substantial portion of the overall decrease in March resulted from declines in the indexes for mining and utilities, which fell 2.9 percent and 1.2 percent, respectively. Substantial cutbacks in coal mining and in oil and gas well drilling and servicing, as well as decreases in oil and natural gas extraction explain the drag from mining, which has fallen nearly 13 percent over the past 12 months. The index for utilities moved down again, primarily because of a drop of 4.6 percent for natural gas utilities.

In addition, manufacturing output fell 0.3 percent. The production of durables moved down 0.4 percent. The largest declines, about 1 1/2 percent, were registered both by motor vehicles and parts and by electrical equipment, appliances, and components. Several industries posted increases, with the largest, nearly 1 percent, for computer and electronic products. After increasing 0.9 percent in January and decreasing 0.5 percent in February, the output of nondurable manufacturing edged down in March, as gains in the production of petroleum and coal products and of chemicals nearly offset declines for most other industries. The output of other manufacturing (publishing and logging) fell almost 1 percent. For the first quarter, manufacturing output moved up at an annual rate of 0.6 percent, roughly reversing its small decrease in the fourth quarter of last year.

Year-on-year, industrial production declined 2 percent. 

Capacity utilization for the industrial sector decreased 0.5 percentage point in March to 74.8 percent, a rate that is 5.2 percentage points below its long-run (1972–2015) average.

US Industrial Production Falls 0.6% in March

Federal Reserve | Joana Taborda |
4/18/2016 11:45:56 AM