Manufacturing Production Rebounded in February, Up 1.2 Percent, with 2.5 Percent Growth YOY, the Best Since July 2014

The Federal Reserve said that manufacturing production rebounded in February, up 1.2 percent, after edging down by 0.2 percent in January. That was the fastest monthly pace of growth since October, and overall, the data continue to show healthy growth for manufacturers, with strength last year carrying over into the new one. Indeed, manufacturing production has risen by 2.5 percent over the past 12 months, up from 1.6 percent last month and the best year-over-year rate since July 2014. In a similar manner, manufacturing capacity utilization jumped from 76.0 percent in January to 76.9 in February, a reading not seen since April 2008.

In February, durable and nondurable goods production rose by 1.8 percent and 0.7 percent, respectively. The largest monthly increases were in motor vehicles and parts (up 3.9 percent), nonmetallic mineral products (up 3.9 percent), wood products (up 2.6 percent), miscellaneous durable goods (up 2.5 percent), furniture and related products (up 1.9 percent), machinery (up 1.6 percent), computer and electronic products (up 1.5 percent), plastics and rubber products (up 1.4 percent), aerospace and miscellaneous transportation equipment (up 1.3 percent) and apparel and leather (up 1.0 percent), among others. There were just two manufacturing sectors—out of 19—that had declining production in February: petroleum and coal products (down 2.8 percent) and electrical equipment and appliances (down 0.8 percent).

Meanwhile, total industrial production jumped 1.1 percent in February, recovering from the 0.3 percent decline seen in January. In addition to manufacturing, mining production soared 4.3 percent in February, but utilities output was off by 4.7 percent, likely on warmer temperatures. Over the past 12 months, industrial production has risen 4.4 percent, its highest rate since March 2011. Mining and utilities output increased 9.7 percent and 10.5 percent year-over-year, respectively. In addition, capacity utilization soared from 77.4 percent to 78.1 percent, its strongest rate since January 2015.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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