U.S. industrial output rises, defying expectations

WASHINGTON – U.S. factory, mine and utility output rose 0.3 percent last month, after falling a revised 0.7 percent in February, the Federal Reserve reported today.
Analysts had expected industrial production to shrink 0.1 percent in March, based on the median forecast from a Bloomberg News survey of 76 economists. (Their projections ranged from a 0.6-percent decline to a 0.4-percent increase.)
Manufacturing production rose 0.1 percent in March, “held down by a large decline in the output of motor vehicles and parts; a shortage of motor vehicle parts that resulted from a strike at a parts manufacturer idled a number of motor vehicle assembly plants,” the Fed said. Excluding automobiles and auto parts, manufacturing production rose 0.4 percent last month falling 0.5 percent in February.
Utility output rose 1.9 percent in March, while the output of U.S. mines rose 0.9 percent.
Compared with March 2007, overall industrial production increased 1.6 percent – to 112.1 percent of the benchmark 2002 average – as manufacturing output rose 1.2 percent, utility output 2.3 percent and mining output 3.2 percent.
Meanwhile, the nation’s total industrial capacity increased 1.9 percent compared with a year ago. Capacity utilization – a measure of the proportion of industrial plants in use – rose 0.2 percentage points to 80.5 percent. Over the past 30 years, Bloomberg said, utilization has averaged 81 percent.
Manufacturing “is holding up better than you would expect,” Michael Feroli, a JPMorgan Chase & Co. economist in New York , told Bloomberg News. “Export demand is the key supporting the industrial sector. And it doesn’t look like capital spending has been cut quite as much as you would expect in this stage of the economy.”
Additional economic research data, including the full Industrial Production and Capacity Utilization release is available from the Federal Reserve at www.federalreserve.gov.