Industrial production stays still as manufacturing rises

Andrew Cummings
March 20, 2017

"The stagnation in industrial production in February was entirely due to another weather-related contraction in utilities output, with activity in the mining and manufacturing sectors continuing to recover strongly".

Industrial production was flat in February, the Federal Reserve said Friday.

By major market groups, final products output was flat versus January (consumer goods: -0.4%, business equipment: 0.7%) while that of non-industrial supplies gained 0.3% and within that output in construction higher by 1.3%. Indeed, manufacturing production has increased 1.2 percent over the past 12 months, up from 0.6 percent in the prior report.

The increase in manufacturing last month matched the median forecast in a Bloomberg survey. Utility production plunged 5.7% as unseasonably warm weather reduced the need for heating exceeding the 0.2% estimate by economists in a survey compiled by a Bloomberg survey of economists. The prior month was revised to a 0.1 percent drop from a previously reported 0.3 percent decline. Capacity utilization for the industrial sector declined 0.1 percentage point in February to 75.4%, a rate that is 4.5 percentage points below its long-run (1972-2016) average. The Fed's figures showed well drilling is up 31 percent over the past year.

Motor vehicles and parts were just shy of that mark with an increase of 0.8 per cent in the month, reversing the decline of the same amount in January. There were also increases in the production of primary metals, fabricated metal products and nonmetallic mineral products.

Output of business equipment climbed 0.7 percent last month after a 0.1 percent drop in January, while production of construction supplies jumped another 1.3 percent following a 1.4 percent surge.

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