The Federal Reserve reported April 15 that industrial production in March rose 1.4%, returning to growth after an unseasonably stormy February knocked it down 2.6%. The report shows total industrial production rose 2.5% at an annualized rate during the first quarter of 2021 despite the losses endured in February by manufacturing, mining, and utilities companies.
The industrial production gauge includes productivity in three sectors: manufacturing, mining, and utilities. Manufacturing production (which excludes mining and utilities output) rose 2.7% in March after falling 3.7% the month before. Mining production improved 2.7%, while utility output fell 11.4% thanks to unseasonably warm March temperatures. Manufacturing output rose 1.9% at an annualized rate.
Capacity utilization in manufacturing rose by 1.9 points, also reversing February losses.
Almost all market groups saw improvements in March, despite lingering challenges. The Federal Reserve’s index for other manufacturing, which includes publishing and logging, remained the same, but durable goods and nondurable goods indexes rose 3.0% and 2.6%, respectively.
Motor vehicles and parts production, which fell 10% in February, rose 2.8% in March but remained depressed by a persistent shortage of semiconductors. Most durable goods indexes rose between 2% to 3%.
In nondurable manufacturing, the index for the chemicals industry rose 4.1%, and petroleum and coal products rose 5.7%, although neither sector has fully recovered from severe weather damage—the Federal Reserve noted that some chemicals factories remain offline thanks to damage sustained from February’s winter storms. Most nondurable goods indexes rose between 0.9% and 3.0%.
If February was notable for its storminess, March was notable for its heat. The unseasonably warm month coincided with a roughly 10% drop in consumer energy products, and the 11.4% drop in utilities utilization was the largest recorded in the history of the index’s 48-year history.
