Unseasonably warm temps limited March industrial production

Industrial production fell 0.3 percent in March due to warmer-than-average temperatures, according to the Federal Reserve industrial production report. Despite the drop, industrial production increased at an annualized rate of 5.5 percent last month. .March’s drop was sparked by a nearly 6 percent decrease in the index for utilities, according to the report. The indexes for manufacturing and mining increased 0.3 percent and 0.6 percent, respectively. Total industrial production, at 103.9 percent of its 2017 average, was 1.3 percent higher than its year-earlier mark. Capacity utilization dropped to 77.8 percent, 1.8 percentage points under its 52-year average. Manufacturing output increased 0.3 percent last month amid a 5.1 annualized rise in factory output. The index for the production of durable goods increased 0.6 percent. Most categories of durable manufacturing increased in March amid rises in motor vehicle and parts output along with aerospace and various transportation equipment. Sparked by a half-percent increase in durable non-energy production, the manufacturing of non-energy materials increased 0.3 percent, while the output of energy materials dropped 1.7 percent. The production of durable consumer goods increased a half-percent, while the index for nondurables fell 1.4 percent amid a nearly 6 percent drop in nondurable energy. “The production of nondurable goods was little changed in March, as gains in the indexes of food, of apparel and leather, of chemicals, and of plastics and rubber products offset declines in the indexes of textile and product mills, of paper, of printing and support, and of petroleum and coal products,” according to the Federal Reserve. Business equipment output increased 1.7 percent last month, growth sparked by a 4.5 percent jump in the output of transit equipment. The index for business supplies was flat, while the index of construction supplies increased 0.6 percent. The index for publishing and logging manufacturing increased 0.5 percent, while mining output grew 0.6 percent but was essentially unchanged in the first quarter. The utilities index fell 5.8 percent, as the output for electric utilities dropped 5.1 percent and the output for natural gas utilities fell 11.1 percent. Manufacturing capacity utilization increased 0.2 percentage point last month to 77.3 percent, which is nearly a full percentage point under its long-term average. The operating rate for mining increased half a percentage point to 90.6 percent, and the operating rate for utilities dropped 4.4 percentage points to 69.1 percent, which was significantly under its long-term average.