WASHINGTON - Production at US factories increased solidly in March as output at motor vehicle assembly plants and elsewhere rose, suggesting that manufacturing was turning the corner after being constrained by higher borrowing costs.
Manufacturing output rose 0.5 per cent in March after an upwardly revised 1.2 per cent rebound in the prior month, the Federal Reserve said on April 16. Factory output was previously reported to have rebounded 0.8 per cent in February. Economists polled by Reuters had forecast factory output rising 0.3 per cent.
Production at factories increased 0.8 per cent year on year in March. It edged down at a 0.1 per cent annualised rate in the first quarter after contracting at a 0.9 per cent pace in the October-December quarter.
Manufacturing accounts for 10.4 per cent of the economy. A survey from the Institute for Supply Management early in April showed that manufacturing grew for the first time in 1½ years in March.
But with the Federal Reserve expected to delay an anticipated rate cut in 2024 amid stubbornly high inflation, manufacturing is not out of the woods yet.
Motor vehicle and parts output increased 3.1 per cent in March after advancing 3.4 per cent in February. Durable goods manufacturing production rose 0.3 per cent.
There were significant increases in the output of aerospace and miscellaneous transportation equipment, and wood products. But output of non-metallic mineral products, furniture as well as primary metals declined.
Production of non-durable goods rose 0.7 per cent as gains in the output of petroleum and coal products and chemicals offset declines in food, beverage and tobacco products.
Mining output dropped 1.4 per cent after rebounding 3 per cent in February. Utilities production rose 2 per cent after decreasing 7.6 per cent in February.
Overall industrial production rose 0.4 per cent in March after rising by the same margin in February.
Industrial production was unchanged year on year in March. It contracted at a 1.8 per cent pace in the January-March quarter after shrinking at a 1.9 per cent rate in the fourth quarter.
Capacity utilisation for the industrial sector, a measure of how fully firms are using their resources, rose to 78.4 per cent from 78.2 per cent in February. It is 1.2 percentage points below its 1972-2023 average.
The operating rate for the manufacturing sector increased 0.3 percentage points in March to 77.4 per cent. It is 0.8 percentage points below its long-run average. REUTERS
