Posted May 14, 2010
Industrial production up in April
Industrial production increased 0.8 percent in April after having risen 0.2 percent in March.
The Federal Reserve said manufacturing output climbed 1.0 percent in April for a second consecutive month and was 6.0 percent above its year-earlier level. The increases in manufacturing continued to be broadly based across industries. Outside of manufacturing, the output of mines rose 1.4 percent, and the output of utilities decreased 1.3 percent.
"The industrial sector is benefiting from increased domestic demand, a strong export expansion, and to an important extent from a cyclical inventory swing," said Daniel Meckroth, chief economist for the Manufacturers Alliance/MAPI, regarding the industrial production report for April 2010. "The current supply chain is exceptionally lean as firms very cautiously expand production in response to the sudden pick up in orders. Inventories, nevertheless, have increased only modestly because materials are consumed in expanding production and supply availability has limited the ability to increase stocks.
"Many industries are struggling to ramp up production fast enough," he added. "The widespread manufacturing rebound is evident from the fact that 17 of the 20 major manufacturing industry groups grew in April and one industry was flat. Just as inventory destocking made the recession worse in manufacturing, the inventory swing has pushed manufacturing growth well above the pace of overall economy. We expect to see continued moderately strong growth in manufacturing activity this year as the industrial sector restocks and benefits from the economic recovery."
