U.S. Industrial Production Declines in March, the First M/M Decrease Since November
Summary
- March IP -0.3% (+1.3% y/y), led by a 5.8% m/m drop in utilities output.
- Mfg. IP +0.3%, reflecting m/m rises of 1.8% in aerospace & misc. transp. equipt. and 1.2% in auto production (w/ durable goods up 0.6% and nondurable goods unchanged).
- Mining activity rises 0.6%, the third m/m gain in four months.
- Key categories in market groups post mixed results.
- Capacity utilization down 0.4%pt. to 77.8%; mfg. capacity utilization up 0.2%pt. to 77.3%, the highest since May ’24.
Industrial production (IP) fell a slightly more-than-expected 0.3% m/m in March following an upwardly revised 0.8% gain in February (+0.7% initially) and a downwardly revised 0.2% increase in January (+0.3% previously), data from the Federal Reserve Board showed. The March reading was the first m/m decrease since November. A 0.2% m/m March decline had been expected in the Action Economics Forecast Survey. The year-on-year rate of increase eased to 1.3% in March, the lowest since December, from 1.4% in February; nevertheless, it was an improvement from -0.3% y/y in March 2024. The March IP index was at 103.9, slightly down from February’s record-high 104.2; it was 4.9% above a low of 99.0 in September 2021 and 8.8% above a low of 95.5 in February 2021.
By industry groups, manufacturing production rose 0.3% (1.0% y/y) in March, the fifth straight m/m rise, after an upwardly revised 1.0% increase in February (+0.9% initially). Durable goods production grew 0.6% (0.7% y/y) in March, the fourth m/m gain in five months, after a 1.6% increase in February. This reflected m/m output rises of 1.8% (5.1% y/y) in aerospace & miscellaneous transportation equipment, 1.2% (-4.9% y/y) in motor vehicles & parts, 1.0% (6.8% y/y) in computer & electronic products, 0.9% (2.3% y/y) in machinery, 0.9% (4.5% y/y) in nonmetallic mineral products, 0.8% (-1.0% y/y) in fabricated metal products, and 0.7% (-2.2% y/y) in furniture & related products. In contrast, the following durable goods categories fell m/m in March, including output drops of 3.0% (+2.6% y/y) in wood products and 0.4% (+3.7% y/y) in electrical equipment, appliances & components. Notably, aircraft & parts production climbed 2.8% (7.7% y/y) in March, the fifth consecutive m/m rise, on top of a 2.5% increase in February. Meanwhile, productions for miscellaneous durables goods (-5.7% y/y) and primary metals (-1.5% y/y) were virtually unchanged m/m in March.
Nondurable goods production was essentially unchanged m/m (1.5% y/y) in March after rising 0.5% in February and holding steady in January. The stability in March reflected m/m output rises of 2.2% (-1.0% y/y) in apparel & leather goods, 1.0% (-2.9% y/y) in plastics & rubber products, 0.6% (6.4% y/y) in chemicals, and 0.2% (-0.3% y/y) in food, beverages & tobacco. To the downside, the following nondurable goods categories fell m/m in March, including output drops of 2.3% (-2.3% y/y) in petroleum & coal products, 2.1% (-1.9% y/y) in textiles & product mills, 0.7% (+0.5% y/y) in paper, and 0.4% (+0.8% y/y) in printing & related support activities.
Utilities output, amid warmer temperatures than usual in March, dropped 5.8% (+4.4% y/y) following a 1.5% decline in February (-2.5% initially) and two successive m/m increases. In contrast, mining activity rose 0.6% (1.0% y/y), up from the third month in four, after a downwardly revised 1.7% February rise (+2.8% initially).
By market groups, business equipment output rose 1.7% (1.1% y/y) in March, the fifth straight m/m rise, after a 1.8% gain in February. Construction supplies production grew 0.6% (2.2% y/y), the third m/m increase in four months, after a 1.4% February rise. To the downside, consumer goods output fell 1.0% (+0.3% y/y) in March, the first m/m fall since November, after a 0.5% increase in February, reflecting a 0.5% rise (-4.2% y/y) in durable consumer goods and a 1.4% drop (+1.6% y/y) in nondurable consumer goods. Materials production declined 0.5% (+1.7% y/y) following a 1.0% February rebound.
In special classifications, factory output of selected high-tech industries rose 0.3% (11.3% y/y) in March, the eighth m/m rise in nine months, after a downwardly revised 0.8% gain in February (+1.4% initially). Manufacturing production excluding selected high-tech industries was up 0.3% (0.7% y/y) in March, the fourth m/m increase in five months, after a 1.1% rise in February; manufacturing production excluding selected high-tech and motor vehicles & parts grew 0.3% (1.2% y/y), the fourth consecutive m/m gain, after a 0.5% February increase.
Capacity utilization fell to 77.8% in March after rising to an eight-month-high 78.2% in February (unrevised). The Action Economics Forecast Survey forecasted 77.9%. The March reading was 1.8 percentage points below its long-run (1972–2024) average. Manufacturing capacity utilization rose to 77.3% in March, the highest since May 2024, from an upwardly revised 77.1% in February (77.0% initially); the March rate was 0.9 percentage points below its long-run average.
Industrial production and capacity data are 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.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
More Economy in Brief
Global
