US Industrial Output Falls Unexpectedly

US industrial output edged down 0.1 percent from a month earlier in March 2019, reversing a 0.1 percent advance in February and missing market expectations of a 0.2 percent gain.
Federal Reserve | Joana Ferreira | 4/16/2019 1:50:46 PM
Mining output declined 0.8 percent in March, after being unchanged in the previous month.

Manufacturing output stalled in March, following a 0.3 percent drop in February. The output of durables edged down 0.1 percent in March (vs unchanged in February) led by declines in wood products (-2.2 percent vs 0.9 percent) and motor vehicles and parts (-2.5 percent vs 2.3 percent), while gains were registered by primary metals (1.2 percent vs -0.7 percent) and by computer and electronic products (1.1 percent vs 0.8 percent). Meanwhile, the production of nondurables inched up 0.1 percent (vs -0.8 percent in February) as a result of increases in the indexes for textile and product mills (0.9 percent vs 0.4 percent), for petroleum and coal products (1 percent vs -4.5 percent), and for chemicals (0.3 percent vs -0.6 percent). The index for other manufacturing (publishing and logging) edged down 0.1 percent, after a 0.7 percent advance in February.

The output of utilities rose 0.2 percent in March, easing from a 3.7 percent growth in the previous month, due mainly to a decline in the output of electric utilities (-0.5 percent vs 3.5 percent); while the output of natural gas utilities climbed 3.8 percent, compared to 4.6 percent in February.

Capacity utilization for the industrial sector decreased 0.2 percentage point in March to 78.8 percent, a rate that is 1.0 percentage point below its long-run (1972–2018) average. Capacity utilization for manufacturing edged down 0.1 percentage point in March to 76.4 percent, about 2 percentage points below its long-run average. The utilization rate for durable manufacturing declined, while capacity utilization rates for nondurable manufacturing and for other manufacturing (publishing and logging) were unchanged. Capacity utilization for mining decreased to 90.9 percent but was still above its long-run average of 87.1 percent. The utilization rate for utilities was unchanged at 79.9 percent and remained 5 1/2 percentage points below its long-run average.

Considering the first quarter as a whole, industrial output fell at a 0.3 percent annualized rate, after growing at a 4 percent pace in the October-December 2018 period. Also, factory activity dropped at a 1.1 percent rate, the first quarterly decline since the third quarter of 2017 and following a 1.7 percent increase in the previous three-month period.

US Industrial Output Falls Unexpectedly