Output at U.S. manufacturers fell in March by the most since August as production of automobiles and parts and business equipment declined, Federal Reserve data showed on Tuesday.
Key Points: Factory production dropped 0.4%, following a 0.3% rise in February (forecast called for unchanged); total industrial production gained 0.5% on a record jump in utility output (forecast called for 0.5% rise); and capacity utilization, which measures the amount of a plant that is in use, rose to 76.1% from 75.7% in the prior month (forecast called for 76.1%).
The weakness in auto manufacturing mirrors a slowdown in sales to consumers, indicating that a broader recovery in factories remains bumpy, with production rising 0.8% last month from a year earlier. The rebound in utility output follows two months of sharp declines amid unusually warm weather and may reflect stronger demand for heating with March temperatures that were a bit more seasonal.
Among other details:
• Utility output rose 8.6%, the most in data going back to 1939, after a 5.8% drop the previous month.
• Production of motor vehicles fell 3%, the most since last May. Excluding autos and parts, industrial production fell 0.3% after a 0.4% rise.
• Oil and gas well drilling rose 7.7%.
• Production of non-energy materials fell 0.6% after a 0.7% gain.
• Production of nondurable consumer goods rose 2.1%, while output of business equipment decreased 0.4%.
• Machinery production fell 0.5% and output of computers and electronics rose 0.9%.
By Patricia Laya