U.S. Industrial Output Rose 0.7% in March

Industrial production rose 0.7% last month due to increases in the manufacture of automobiles and the output of utilities, the Federal Reserve said today.

The gain followed a revised 0.8% increase in February, when output rebounded from a decline in automobile production the previous month as auto makers trimmed inventories. Industrial production in February was originally reported to have risen 0.6%.

The Fed said the operating rate of the nation’s factories, mines and utilities--which usually moves in tandem with industrial production--advanced 0.4 percentage point to 83.3% last month. The operating rate measures not only output but also changes in productivity levels.

“Much of the rise in industrial production during the past two months reflected large increases in the output of motor vehicles and parts, which had been curtailed sharply in January when its operating rate fell to its lowest level since January, 1983,” the Fed reported.

“The other major contributor to the overall production increase in March was utility output, which increased markedly as temperatures were more normal after an unseasonably warm January and February,” it added. “Elsewhere, production was little changed, on balance, in March.”

Industrial production at manufacturing plants making both durable and non-durable goods edged up 0.3% in March after rising 1.1% a month earlier.

Durable manufacturing was up 0.9% after gaining 1.7% in February. Non-durable manufacturing dipped 0.4% in March after inching up 0.2% a month earlier.

Output at mines rose 0.6% last month. Utility output jumped 6.1% in March after falling 1.2% in February.

Today’s report combined the previously separate output and capacity utilization reports.

“The rise in production of motor vehicles and parts pushed capacity utilization in manufacturing up slightly in March,” the Fed said. “Nonetheless, it remains below its level of a year ago.”

The manufacturing operating rate rose 0.1 percentage point to 82.7%.