U.S. industrial production had a second straight solid monthly increase in March, according to Federal Reserve data released April 16, largely driven by the manufacturing sector.

The Fed’s latest Industrial Production and Capacity Utilization report showed that monthly industrial production increased 0.4% in March, identical to February’s revised mark (up from previous +0.1%) and a considerable flip from January’s -0.8%.

The Fed revised February’s growth up from 0.1% to 0.4%, marking the first time growth occurred over two straight months since March-April 2023.

Manufacturing output increased 0.5% during March (+1.2% in Feb.), driven by a 3.1% gain in motor vehicles and parts. Excluding that, factory output improved 0.3%. The index for mining fell 1.4% (+3.0% in Feb.), while the index for utilities gained 2% (-7.6% in Feb.).

For the entire first quarter of 2024, March’s industrial production was down 1.8% year-over-year.

PMI: U.S. Factory Activity Expanded for First Time in 18 Months (April 1)

At 102.7% of its 2017 average, total March industrial production was unchanged year-over-year. Capacity utilization moved up to 78.4% in March — down 1.2 percentage points from its long-run (1972-2023) average.

Market Groups

The output of most major market groups moved up in March. The production of consumer durables gained 1.9%, driven by a 3.2% increase in the output of automotives. Other significant gains were in the indexes of nondurable consumer goods (+1.0%), defense and space equipment (+0.9%) and business supplies (+0.8%). Meanwhile, the production of energy materials fell 0.3% and construction supplies fell 1.0%.

Industry Groups

Manufacturing output increased 0.5% in March and was up 0.8% year-over-year. For all of 1Q24, factory output dipped 0.1% year-over-year. The indexes for durable manufacturing and nondurable manufacturing moved up 0.3% and 0.7% in March, respectively, while the index for other manufacturing (publishing and logging) dipped 0.2%.

Within durable goods, industry groups had mixed March results. Significant gains were seen in motor vehicles and parts (+1.2%), and wood products (+0.7%). Meanwhile, the indexes for nonmetallic mineral products, furniture and primary metals fell 1.8%, 1.0% and 0.7% respectively. In nondurables, petroleum and coal products gained 4.8% and chemicals gained 0.7%, partially offset by a 0.5% decline in the output of food, beverage and tobacco products.

March’s mining output fell 1.4% month-to-month, while its 1Q24 total fell 12.3% year-over-year. March utilities output increased 2%.

Capacity utilization for manufacturing increased 0.3% in March to 77.4% — down 0.8% from its long-run average. The operating rate for mining fell 1.3 points to 91.0%, while utilities’ increased 1.2 points to 69.1%. The rate for mining was 4.5 points above its long-run average, while utilities’ remained well below its long-run average.