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Economy in Brief

U.S. Industrial Production Remains Strong in March
by Tom Moeller  April 15, 2022

• Overall production growth is steady but factory sector slows.

• Slowdown is broad-based.

• Capacity utilization strengthens.

Industrial production increased 0.9% (5.5% y/y) during March following a 0.9% February gain, revised from 0.5%. January's 1.0% rise was revised from 1.4%. A 0.4% increase had been expected in the Action Economics Forecast Survey. Manufacturing output rose 0.9% (4.9% y/y) in March after increasing an unrevised 1.2% in February. January's 0.2% gain compared to 0.1% reported last month. Utilities output rose 0.4% (7.5% y/y) following February's 1.0% decline. Mining output strengthened 1.7% (7.0% y/y) after a 1.2% February increase.

The March production increase was led by a 7.8% rise (3.9% y/y) in motor vehicle output which followed a 4.6% decline. Output of computers & electronic products improved 0.6% (7.5% y/y) following a 2.1% jump. Machinery production rose 0.8% (6.1% y/y) after increasing 0.5% and electrical equipment & appliance production rose 1.0% (5.5% y/y), half the February increase. In the nondurable goods sector, the lessened 0.4% rise reflected a 0.5% gain (-0.3% y/) in apparel production as it came after February's 2.1% surge. Chemical production rose a fairly steady 0.7% (9.8% y/y) while food & beverage output increased 0.3% (0.8% y/y), half the prior month's increase. Petroleum output rose 0.7% (2.4% y/y) after February's 2.4% surge.

In the special classifications, factory output of high technology industries rose 1.4% in March (8.9% y/y) after a 2.6% gain. Less the high technology sector, factory output rose 0.8% (4.8% y/y) following a 1.4% rise. Manufacturing production excluding both high tech and autos rose 0.4% (4.9% y/y) after surging 1.5% in February.

Capacity utilization rose to 78.3% last month from 77.7% in February. A 77.8% rate had been expected. Utilization in the factory sector rose to 78.7%, the highest rate since July 2007. Factory sector capacity rose 0.3% y/y.

Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.

Industrial Production (SA, % Change) Mar Feb Jan Mar Y/Y 2021 2020 2019
Total Output 0.9 0.9 1.0 5.5 5.5 -7.2 -0.8
Manufacturing 0.9 1.2 0.2 4.9 6.2 -6.6 -2.0
   Durable Goods 1.3 1.2 0.4 5.7 8.4 -8.2 -2.1
     Motor Vehicles & Parts 7.8 -4.6 1.1 3.9 8.3 -15.7 -3.0
     Selected High Tech Equipment 1.4 2.6 0.3 8.9 11.0 7.1 3.9
   Nondurable Goods 0.4 1.2 -0.2 4.7 4.3 -4.4 -1.8
Utilities 0.4 -1.0 7.5 7.5 2.0 -3.4 -0.8
Mining 1.7 1.3 0.5 7.0 2.8 -14.2 5.9
Capacity Utilization (%) 78.3 77.7 77.0 74.8 75.4 71.6 77.4
   Manufacturing 78.7 78.1 77.2 75.3 75.8 71.2 75.8
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