U.S. industrial production decreased in March following a major increase in February.

The Federal Reserve’s latest Industrial Production and Capacity Utilization report, issued on April 16, showed production decreased 0.3% in March month-to-month, falling below market expectations of a 0.2% decline polled by major news outlets. Production increased 0.8% in February and 0.2% in January after revisions.

At 103.9% of its 2017 average, total industrial production increased 1.3% year-over-year. Capacity utilization moved down to 77.8%, which was 1.8 percentage points below its long-run (1972-2024) average.

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Total March production was impacted by a decrease of 5.4% in the index for utilities, partially offset by an increase in manufacturing and mining of 0.3% and 0.6%, respectively.

U.S. Total Industrial Production Index – Month-Over-Month

source: tradingeconomics.com

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Market Groups

Most market groups saw mixed results in March. Among the index for consumer goods, the production of durables saw an increase of 0.5%, offset by a decline in nondurable goods of 1.4% and held down by a drop in nondurable energy goods of 5.9%.

Business equipment showed a positive gain with a 1.7% increase in March, driven by a strong gain in transit equipment of 4.5%.

Industry Groups

Manufacturing output increased 0.3% in March month-over-month. Nondurable manufacturing was unchanged in March, as gains in food, apparel and leather, chemicals and plastics and rubber offset declines in textile and product mills, paper, printing and support and petroleum and coal products. In contrast, the index for other manufacturing (Publishing and logging) saw an increase of 0.5%.

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Mining output increased 0.6% in March month-to-month, while utilities decreased 5.8%, as output for electric utilities declined by 5.1% and natural gas utilities drastically fell by 11.1%.

Capacity utilization for manufacturing increased 0.2-points in March to 77.3%.