Manufacturing Production Edged Up 0.1 Percent in March, with 3.0 Percent Growth YOY, the Best Rate Since June 2012

The Federal Reserve reported that manufacturing production edged up 0.1 percent in March, extending ever so slightly the robust gain of 1.5 percent in February. Overall, the data continue to show healthy growth for manufacturers, especially relative to one year ago. Indeed, manufacturing production has risen 3.0 percent over the past 12 months, up from 2.5 percent last month and the best year-over-year rate since June 2012. With that said, manufacturing capacity utilization inched down from 76.0 percent in February—a reading not seen since August 2015—to 75.9 in March. (Note that there was a new seasonal adjustment revision in March for the historic data series.)

In March, durable goods production increased 0.4 percent, whereas output among nondurable goods manufacturers fell 0.3 percent. The largest monthly increases occurred in motor vehicles and parts (up 2.7 percent), petroleum and coal products (up 1.8 percent), computer and electronic products (up 1.0 percent) and primary metals (up 0.5 percent), among other sectors. In contrast, production decreased for electrical equipment, appliances and components (down 1.9 percent), food, beverage and tobacco products (down 1.3 percent), textile and product mills (down 1.1 percent), miscellaneous durable goods (down 1.0 percent), printing and support (down 1.0 percent), plastics and rubber products (down 0.7 percent) and apparel and leather (down 0.6 percent).

Meanwhile, total industrial production rose 0.5 percent in March, following a 1.0 percent increase in February. In addition to manufacturing, mining and utilities production increased 1.0 percent and 3.0 percent, respectively, in March. Colder weather helped to contribute to better utilities output for the month. Over the past 12 months, industrial production has risen 4.3 percent, pulling back marginally from the 4.4 percent pace in February, which was the best since January 2011. Mining and utilities output has risen 10.8 percent and 5.3 percent year-over-year, respectively. In addition, capacity utilization ticked up from 77.7 percent in February to 78.0 percent in March, the strongest rate in three years.

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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.

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