US March Industrial Output Growth Stronger than Expected

US industrial production increased by 0.5 percent month-over-month in March 2018, following a downwardly revised 1 percent advance in February and beating market expectations of a 0.4 percent gain. Manufacturing and mining growth eased from the previous month, while utilities output rebounded sharply after being suppressed in February by warmer-than-normal temperatures.

Manufacturing production edged up 0.1 percent in March, easing from a 1.5 percent gain in the previous month. Durable manufacturing went up 0.4 percent (vs 1.8 percent in February), as output rose for motor vehicles and parts (2.7 percent vs 3.9 percent) and computer and electronic products (1 percent vs 0.9 percent), but fell for fabricated metal products (-0.2 percent vs 1.9 percent) and machinery (-0.4 percent vs 0.2 percent). In addition, nondurable manufacturing shrank 0.3 percent, after a 1.2 percent growth in February. Food, beverage, and tobacco products output decreased 1.3 percent (vs 2.1 percent in February) while chemicals production advanced 0.3 percent (vs 1.3 percent in February).

Mining output rose 1 percent, following a 2.9 percent surge in February, mostly as a result of gains in oil and gas extraction and in support activities for mining. 

The index for utilities jumped 3 percent in March after a 5 percent slump in February on warmer-than-normal temperatures. Output rebounded for both natural gas (15.6 percent vs -12.9 percent) and electric (1.2 percent vs -3.8 percent).

Capacity utilization for the industrial sector moved up 0.3 percentage point in March to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972–2017) average.

US March Industrial Output Growth Stronger than Expected

Federal Reserve | Joana Ferreira |
4/17/2018 1:28:37 PM