Industrial Production Rises 1% in February

Industrial production increased 1.0 percent in February after a decrease of 0.3 percent in January and a rise of 0.8 percent in December. Output in the manufacturing sector gained 0.4 percent in February and was led by increases in motor vehicles and in high-technology goods.
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The output of utilities jumped 6.7 percent in February, as colder-than-average temperatures boosted production at both electric and natural gas utilities. The output of mines edged up 0.1 percent. At 113.1 percent of its 2002 average, overall industrial production for the month was 3.4 percent above its year-earlier level.
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The rate of capacity utilization for total industry in February rose 0.6 percentage point, to 82.0 percent, a level 1.0 percentage point above its 1972-2006 average.
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Market Groups
All major market groups except construction supplies recorded production increases in February. The output of consumer goods advanced 1.5 percent. Within durables, a rebound of 3.2 percent in the output of automotive products was led by an increase in the production of light trucks. A jump in computer production boosted the output of home electronics, but the indexes for home appliances, furniture, and carpeting and for miscellaneous goods both declined. Consumer nondurables advanced 1.5 percent as a result of a surge of 5.3 percent in the production of consumer energy products. The output of non-energy nondurables rose 0.3 percent; gains in paper products and in foods and tobacco outweighed declines in clothing and in chemical products.
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The output of business equipment rose 0.4 percent in February, as a gain in information processing equipment more than offset widespread declines in the production of transit equipment except for light trucks. The index for industrial and other equipment was little changed after a decrease of roughly 3-1/2 percent in January. The output of defense and space equipment edged up 0.2 percent. The output of construction supplies contracted 0.6 percent, to a level 2.5 percent lower than that of a year earlier. The output of business supplies moved up for a third consecutive month.
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The production of materials expanded 1.0 percent; about half of the increase resulted from higher output of energy materials, which was driven by a jump in electricity generation. Within non-energy materials, the production of both durable and nondurable materials increased. Among durables, the output of consumer parts recovered 1.5 percent after a decline of the same amount in January; the increase resulted from a strong rise in the indexes related to motor vehicle parts. Gains in semiconductors and related components led advances in equipment parts; the production of other durables edged up 0.3 percent. Among nondurable materials, chemical production was flat, and the output of textiles and of paper increased.
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Industry Groups
Manufacturing output rose 0.4 percent in February. The production of both durables and non-NAICS manufacturing (logging and publishing) increased, but the output of nondurable manufacturing slipped. The factory operating rate edged up 0.2 percentage point, to 80.1 percent. The production of durable goods rose 0.8 percent and largely reversed its January decline.
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The indexes for computer and electronic products and for motor vehicles and parts rose more than 2 percent; the gains more than offset declines in the indexes for wood products, nonmetallic mineral products, machinery, and furniture and related products. Output at nondurable manufacturers edged down 0.2 percent. Declines occurred in apparel and leather, petroleum and coal products, and plastics and rubber products. The indexes for food, beverage, and tobacco products; for textile and product mills; and for paper increased, while printing and support was unchanged.
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Cold temperatures in February led to a jump of 11

percent in the output of natural gas utilities for a second consecutive month and to a run-up of 5.9 percent in the output of electric utilities. Mining production edged up 0.1 percent; declines in oil and gas extraction and coal mining were roughly offset by gains in nonmetallic mineral mining, metal ore mining, and support activities for mining. Capacity utilization for industries in the crude stage of processing slipped 0.2 percentage point, to 88.3 percent, in February. Capacity utilization for industries in the primary and semifinished stages moved up 1.0 percentage point, to 83.4 percent, and capacity utilization for industries at the finished stage increased 0.4 percentage point, to 78.3 percent.