The Federal Reserve said that manufacturing production rebounded strongly in April after pulling back in March. Output in the sector rose by 1.0 percent, led by a significant recovery in motor vehicles and parts production, up 5.0 percent, among others. It was the sixth time in the past seven months that manufacturing production has increased. While the sector continues to have some lingering challenges, this report is yet another sign that the sector has turned a corner and is moving in the right direction. Indeed, manufacturing production has increased 1.7 percent over the past 12 months, its strongest year-over-year pace since January 2015. Similarly, manufacturing capacity utilization jumped from 75.2 percent to 75.9 percent, a level not seen since December 2014.
Digging into the underlying data, durable and nondurable goods output were both up by 1.0 percent in April, mirroring the manufacturing sector as a whole. Beyond automotive, the largest gains in the sector were seen in the following segments: petroleum and coal products (up 2.5 percent), electrical equipment and appliances (up 1.8 percent), miscellaneous durable goods (up 1.8 percent), food, beverage and tobacco products (up 1.6 percent), textile and product mills (up 1.4 percent), printing and support (up 1.0 percent), machinery (up 0.9 percent), plastics and rubber products (up 0.9 percent) and paper (up 0.8 percent). In contrast, there was reduced production for the month in the nonmetallic mineral products (down 1.0 percent), aerospace and miscellaneous transportation equipment (down 0.7 percent), primary metals (down 0.6 percent) and apparel and leather (down 0.1 percent) sectors.
Meanwhile, total industrial production also increased by 1.0 percent in April, its fastest monthly gain in just over three years. In addition to manufacturing, mining and utilities output were higher for the month, up 1.2 percent and 0.7 percent. Over the past 12 months, total industrial production has risen 2.2 percent. Much like the manufacturing data described above, that was the highest year-over-year rate since January 2015, and it was a definite improvement from the -1.7 percent year-over-year rate seen one year ago. Mining production has increased 7.3 percent year-over-year, but utilities output was off by 0.5 percent since April 2016. Capacity utilization rose from 76.1 percent to 76.7 percent, a 20-month high.