Industrial, Manufacturing Output Move in Different Directions in March

Apr 18, 2017

Industrial output was the strongest of the year in March (in line with expectations) despite the biggest drop-off (worse than expected) in manufacturing output since last August. In addition to the 0.4% decline in manufacturing, the results for January and February were both revised down 0.2%; to +0.4% and +0.3%, respectively. While disappointing, a breather for the manufacturing sector isn’t too surprising as the output index had risen for six consecutive months through February; the longest string of gains since 2011. Capacity utilization ticked up from 75.7% to 76.1%, the highest since October 2015. In the face of weaker manufacturing results, the headline industrial output result was buoyed by surging utilities output. Utilities output rose 8.7% in March, the biggest monthly gain on records that reach back to 1972. Swings in utilities output are generally weather-driven and the big March gain followed a record-warm February and a string of notably weak reports over the last six months. Mining was essentially unchanged.