· Industrial
production last month rose 0.3% after a 0.7% February decline which was
deeper than reported initially. Also revised down was production growth
last year and during 2006. A 0.1% decline in March output had been the
Consensus expectation.
· Factory output ticked up 0.1% in March after falling by a downwardly revised 0.5% in February. The three month change in output, however, fell to a negative 1.4% (AR). Production in the high tech sector has been strong and rose 1.3% (13.1% y/y), as it did in February. Outside the high tech sector, factory output fell 0.1% and a February decline was revised deeper to -0.7%. Three month output growth in manufacturing output less high tech fell to -2.8% (AR) but appliance production rose 5.0% last month.
· Production of computers &
electronics surged again last month by 2.6% and three month growth
totaled 20.3% (AR).
· Weakness elsewhere in the durable goods area continued intense. Output of furniture & appliances is down at a 10.5% rate during the last three months while production of automotive products has fallen at a 29.0% rate. Auto output is down partially due to the workers' strike at the American Axel Company. Machinery production is off at a 1.2% rate and metals output turned negative. In the nondurables sector apparel product output has fallen at a 10.8% rate over the last three months.
· Output of business equipment increased 0.6% after no change in February. Output of industrial equipment less high tech recovered 0.7% after a 0.2% February slip. The three month growth rate improved to 3.9%.
· Capacity utilization rose slightly to 80.5% during March but utilization in the factory sector slipped to 78.5%, its lowest also since late 2005. Annual growth in capacity is growing 1.8% y/y and at 2.1% in the factory sector. Less high tech, capacity growth is a lower 0.9% y/y.