Industrial production rises in February

Industrial production edged up 0.1 percent in February following a gain of 0.9 percent in January.

Production was likely held down somewhat by winter storms in the Northeast. Manufacturing decreased 0.2 percent in February, with mixed results among its major industries. The output of mines rose 2.0 percent, while the index for utilities rose 0.5 percent. At 101.0 percent of its 2002 average, industrial output in February was 1.7 percent above its year-earlier level. Capacity utilization for total industry moved up 0.2 percentage point to 72.7 percent, a rate 7.9 percentage points below its average from 1972 to 2009.

In February, manufacturing output fell 0.2 percent after having risen 0.9 percent in January; the level of output in February was 1.5 percent above its year-earlier level. Capacity utilization for manufacturing edged down 0.1 percentage point in February to 69.0 percent, a rate 3.9 percentage points above its trough in June 2009 but 10.2 percentage points below its average for the period from 1972 to 2009.

The output of durable goods fell 0.3 percent in February, after having risen 1.7 percent in January, and was 2.1 percent above its year-earlier level. In February, motor vehicles and parts fell 4.4 percent and nonmetallic mineral products declined 1.6 percent; computer and electronic products rose 1.0 percent and electrical equipment, appliances, and components increased 0.9 percent. The indexes for primary metals, furniture and related products, and miscellaneous manufacturing fell slightly, while the indexes for wood products, fabricated metal products, machinery, and aerospace and miscellaneous transportation equipment rose slightly.

“Unfortunately, severe weather across the coasts of the United States last month disrupted transportation and production schedules," said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI. "Production in consumer durables industries was particularly affected. An important contributor to the weakness was that Toyota closed several factories in February which rippled adversely through the supply chain. Motor vehicle production fell 4.4 percent in February from the previous month.

“It is encouraging, though, that when motor vehicles and parts is removed, manufacturing production was actually up 0.1 percent in February,” he added. “We believe that the fundamentals are strong for continued manufacturing recovery driven by pent up consumer demand, repair and replacement of business equipment, and exports. The minor setback in February is expected to be followed by strong makeup gains in March.”

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