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US manufacturing production increases in March; February data revised upwards

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Production at U.S. factories rose solidly in March, while output at auto assembly plants and elsewhere rose, suggesting the manufacturing sector was turning a corner after being constrained by higher costs. higher borrowing.

Manufacturing production rose 0.5% last month after an upwardly revised 1.2% rebound the month before, the Federal Reserve said Tuesday. Industrial production would have rebounded by 0.8% in February. Economists polled by Reuters forecast an increase in industrial production of 0.3%.

Factory production increased by 0.8% year-on-year in March. It declined slightly at an annualized rate of 0.1% in the first quarter, after contracting at a rate of 0.9% in the October-December quarter.

The manufacturing industry represents 10.4% of the economy. An Institute for Supply Management survey earlier this month showed manufacturing grew for the first time in a year and a half in March.

But with the Federal Reserve expected to delay a planned rate cut this year amid stubbornly high inflation, the manufacturing sector isn’t out of the woods yet.

Production of motor vehicles and parts increased 3.1% last month after increasing 3.4% in February. Manufacturing production of durable goods increased 0.3%. Production of aerospace and miscellaneous transportation equipment as well as wood products has increased significantly. But the production of non-metallic mineral products, furniture as well as primary metals has declined. Production of nondurable goods increased 0.7%, with gains in production of petroleum products, coal and chemicals offsetting declines in food, beverages and tobacco products. Mining production fell 1.4% after rebounding 3.0% in February. Utility output increased 2.0% after falling 7.6% in February. Overall industrial production rose 0.4% in March after increasing by the same margin in February.

Industrial production remained unchanged year-on-year in March. It contracted at a rate of 1.8% in the January-March quarter, following a 1.9% contraction in the fourth quarter.

The industrial sector’s capacity utilization, a measure of the extent to which companies are fully utilizing their resources, increased to 78.4% from 78.2% in February. It is 1.2 points lower than its 1972-2023 average.

The manufacturing sector’s operating rate increased 0.3 percentage points in March to 77.4%. It is 0.8 percentage points lower than its long-term average.

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