Industrial production (IP) decreased 0.3 percent in March but increased at an annual rate of 5.5 percent in the first quarter. The March decline was led by a 5.8 percent drop in the index for utilities, as temperatures were warmer than is typical for the month. In contrast, the indexes for manufacturing and mining grew 0.3 percent and 0.6 percent, respectively. At 103.9 percent of its 2017 average, total IP in March was 1.3 percent above its year-earlier level. Capacity utilization stepped down to 77.8 percent, a rate that is 1.8 percentage points below its long-run (1972–2024) average.
The major market groups posted mixed results in March. Among consumer goods, the production of durables increased 0.5 percent, while the index for nondurables decreased 1.4 percent, held down by a 5.9 percent drop in nondurable energy goods. The output of business equipment climbed 1.7 percent in March, boosted by a 4.5 percent jump in the output of transit equipment. Business supplies posted no change, while the index of construction supplies increased 0.6 percent. The production of non-energy materials rose 0.3 percent, while the output of energy materials fell 1.7 percent. The increase in non-energy materials was driven by a 0.5 percent increase in the durable non-energy component; the nondurable non-energy materials component was flat.
Manufacturing output rose 0.3 percent in March. For the first quarter, factory output expanded 5.1 percent at an annual rate. In March, the production of durable goods increased 0.6 percent. The growth of durable goods output was led by the indexes for motor vehicles and parts and for aerospace and miscellaneous transportation equipment, which rose 1.2 percent and 1.8 percent, respectively, but gains were seen in most categories of durable manufacturing. 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. The index for other manufacturing (publishing and logging) increased 0.5 percent in March.
Mining output grew 0.6 percent in March but was little changed in the first quarter as a whole. In March, the index for utilities decreased 5.8 percent, as the output for electric utilities fell 5.1 percent and the output for natural gas utilities plummeted 11.1 percent. Despite these declines, utilities posted a 16.2 percent gain at an annual rate in the first quarter.
Capacity utilization for manufacturing edged up 0.2 percentage point in March to 77.3 percent, a rate that is 0.9 percentage point below its long-run (1972–2024) average. The operating rate for mining rose 0.5 percentage point to 90.6 percent, and the operating rate for utilities moved down 4.4 percentage points to 69.1 percent. The rate for mining was 4.1 percentage points above its long-run average, while the rate for utilities remained substantially below its long-run average.
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