Total industrial production (IP) rose 0.4% in March (+0.4% expected) but declined at an annual rate of 1.8% in the first quarter. Manufacturing output increased 0.5% in March, boosted in part by a gain of 3.1% in motor vehicles and parts; factory output excluding motor vehicles and parts moved up 0.3%. The index for mining fell 1.4%, and the index for utilities gained 2%. At 102.7% of its 2017 average, total industrial production in March was unchanged compared with its year-earlier level.
Market Groups
Most major market groups recorded growth in March. The production of consumer durables gained 1.9%, bolstered by a 3.2% increase in the output of automotive products. Elsewhere, there were significant gains in the indexes of nondurable consumer goods (1.0%), defense and space equipment (0.9%), and business supplies (0.8%). In contrast, the production of energy materials decreased 0.3%, and the index for construction supplies declined 1.0%.
Industry Groups
Industry
groups within durable manufacturing posted mixed results in March. Significant
gains were recorded in motor vehicles and parts (3.1%), aerospace and
miscellaneous transportation equipment (1.2%), and wood products (+0.7%).
In contrast, the indexes for nonmetallic mineral products, for furniture, and
for primary metals fell 1.8%, 1.0%, and 0.7%, respectively. Within nondurables,
gains in the output of petroleum and coal products (4.8%) and chemicals (0.7%)
were partially offset by a decline of 0.5% in the output of food, beverage, and
tobacco products (paper: +0.6%).
Mining output decreased 1.4% in March and fell at an annual rate of 12.3% in the first quarter. Declines in the output of oil and gas extraction, mining (except oil and gas), and support services for mining all contributed to the first quarter drop in mining output. In March, the output of utilities increased 2%, as both electric and natural gas utilities moved up.
Capacity
utilization (CU) moved up to 78.4% in March, a rate that is 1.2 percentage
points (PP) below its long-run (1972–2023) average.
Manufacturing CU moved up 0.3PP in March to 77.4%, a rate that is 0.8PP below its long-run average (wood products: +0.6%; paper: +0.7%). The operating rate for mining fell 1.3PP to 91.0%, while the operating rate for utilities increased 1.2PP to 69.1%. The rate for mining was 4.5PP above its long-run average, while the rate for utilities remained substantially below its long-run average.
Capacity
at the all-industries level edged up by 0.1% MoM (+1.4% YoY) to 130.9% of 2017
output. Manufacturing also increased by 0.1% (+1.5% YoY) to 129.9%. Wood products: +0.1% (+0.4% YoY) to 120.4%;
paper products: unchanged (-1.0%
YoY) at 105.3%.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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