Industrial Production Dips 2.2% in February

According to the Industrial Production and Capacity Utilization Report, manufacturing output decreased 3.1% during the month.
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Total industrial production fell 2.2% in February, according to the Industrial Production and Capacity Utilization Report, released Tuesday by the Federal Reserve.

Manufacturing output and mining production fell 3.1 percent and 5.4 percent, respectively; the output of utilities increased 7.4 percent. At 104.7 percent of its 2012 average, total industrial production in February was 4.2 percent lower than its year-earlier level. Capacity utilization for the industrial sector decreased 1.7% in February to 73.8 percent, a rate that is 5.8% below its long-run (1972–2020) average.

Most market groups posted losses in February, with the largest decrease of 14.5 percent coming from chemical materials as a result of the shutdowns at plants producing petrochemicals and plastic resins. Consumer energy products posted the only noteworthy increase, jumping 5.6 percent on a surge in utility output.

Most market groups posted losses in February, with the largest decrease of 14.5 percent coming from chemical materials as a result of the shutdowns at plants producing petrochemicals and plastic resins. Consumer energy products posted the only noteworthy increase, jumping 5.6 percent on a surge in utility output.

Manufacturing output decreased 3.1 percent in February. The indexes for durable, nondurable, and other (publishing and logging) manufacturing fell 2.6 percent, 3.7 percent, and 0.5 percent, respectively. Among durables, many industries experienced decreases of between 1 and 3 percent. The largest drop, 8.3 percent, was posted by motor vehicles and parts, while the only increases were recorded by primary metals and by aerospace and miscellaneous transportation equipment. The cutback in the output of motor vehicles and parts, which reflected both a global shortage of semiconductors and the severe weather, reduced overall manufacturing output about 0.5%. Among nondurables, most industries recorded losses. The largest reductions occurred in those industries most affected by the weather: The indexes for chemicals and for petroleum and coal products decreased 7.1 percent and 4.4 percent, respectively.

The output of utilities increased 7.4 percent in February, as the extremely cold winter weather boosted demand for heating. Mining production decreased 5.4 percent; a drop of more than 6 percent for oil and natural gas extraction accounted for most of the loss. The index for oil and gas well drilling continued its climb with an advance of 6.4 percent, though it remained about 50 percent below its year-earlier level.

Capacity utilization for manufacturing decreased 2.3% in February to 72.3 percent. The operating rate for mining decreased 4.3% to 77.5 percent, while the operating rate for utilities increased 5.2% to 78.5 percent; both rates remained below their long-run averages.

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