U.S. Industrial Production Rebounded in March
By Xavier Fontdegloria
Industrial production in the U.S. bounced back in March, partly
reversing its weather-related decline in February, signaling that
the sector is gaining momentum amid strong demand for factory goods
but also hindered by supply bottlenecks.
Industrial production, a measure of factory, mining and utility
output, rose at a seasonally adjusted 1.4% in March compared with
February, the Federal Reserve said Thursday. The reading is the
highest since July 2020, but misses forecasts from economists
surveyed by The Wall Street Journal, who expected a 2.7% rise.
In February, industrial output fell by a revised 2.6% compared
with a 2.2% drop previously estimated. That marked the first
decline in factory production since September amid the harsh winter
weather that hit the south central region of the country.
Manufacturing output--the biggest component of industrial
production--increased by 2.7% in March from the prior month. The
output of motor vehicles and parts rose 2.8% in March after falling
10% in February. Shortages of semiconductors continued to held down
vehicle production, the Fed said.
The U.S. industrial sector is set to continue to be a bright
spot for the economy amid healthy demand and healing business
investment, but production will likely slow in the months ahead as
the services sector fully reopens, economists say. Supply problems
also are set to restrain the overall pace of activity.
Industrial production in March was 1% above the same month a
year earlier, the data showed. In March 2020, the indicator edged
down amid the first wave of the Covid-19 pandemic and its related
factory shutdowns. Production was 3.4% below its pre-pandemic
Mining output increased 5.7% in March with oil and gas
extraction accounting for most of the gain, the Fed said.
Utilities output decreased 11.4%, offsetting some of the gains
elsewhere, as the demand for heating fell because of a swing in
temperatures from an unseasonably cold February to an unseasonably
warm March, the Fed said. The drop for utilities in March was the
largest in the history of this index.
Capacity utilization, which reflects how much industries are
producing compared with what they could potentially produce,
increased to 74.4% in March. Economists expected a 75.7% reading.
Capacity utilization for manufacturing rose 1.9 percentage points
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
April 15, 2021 09:55 ET (13:55 GMT)
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