U.S. industrial output rises 0.7% in April

PBN Staff

05/17/2007

WASHINGTON – The nation’s industrial output increased 0.7 percent in April, pushing the Federal Reserve’s Industrial Production Index to 113.0 points (2002 = 100) after declining 0.3 percent in March to 112.2 points, the Fed said yesterday in its monthly report. Compared with April 2006, overall production increased 1.9 percent.
The monthly increase was more than double the 0.3-percent median forecast of 81 economists surveyed by Bloomberg News, none of whom anticipated a gain of more than 0.6 percent.
Utilities output rose 3.5 percent to 107.9 points, 2.5 percent above its level in April 2006, after falling 7.5 percent in March. Consumer goods and business equipment both rose 0.9 percent. Production of non-industrial supplies and materials rose 0.6 percent, while construction supplies edged up 0.4 percent. The only major sector to decline in April was mining, down 0.3 percent.
Among consumer goods, durable goods increased by 2.1 percent in April, the Fed reported. Home electronics increased 4.8 percent as production of personal computer, audio and video equipment all rose. The indexes for appliances, furniture, carpeting and miscellaneous goods also increased. Among non-durable goods, increases in clothing, chemical products and paper products more than offset declines in foods and tobacco.
Among business and industrial goods, transit equipment rose 1.9 percent led by truck and civilian aircraft production. Defense and space equipment rose 1.0 percent, after decreasing 2.3 percent in March, as shipyard workers returned from a strike. Business supplies rose 0.7 percent, led by medical supplies and commercial sales of gas and electricity.
Capacity utilization, a measure of the proportion of plants that are in use, rose to 81.6 percent in April from 81.2 percent in March. Utilities were at 85.7 percent of capacity while manufacturing plants were at 80.2 percent of capacity.
“It seems that at least the manufacturing part of the economy is going back on stream,” John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C., told Bloomberg News. The report lends “credence to the inventory correction being over – or close to being over – and production is now picking up.”

Additional information, including the full Industrial Production and Capacity Utilization report, is available at www.federalreserve.gov.

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