WASHINGTON — Industrial production edged up 0.1 percent in March, lagging expectations despite growth in the key manufacturing sector. The results underscore the uneven nature of the spreading economic recovery.
Manufacturing, the index’s largest component, grew by a robust 0.9 percent in March, and mining was up 2.3 percent. But those gains were nearly offset by a sharp 6.4 percent drop in utility output, the Federal Reserve reported Thursday.
Utilities enjoyed a major boost from winter storms starting in December, while the weather dampened manufacturing output. March’s temperatures were above average, reducing the demand for heat.
The modest overall gain is lower than February’s 0.3 percent increase, revised up from the 0.1 percent reported earlier. All the figures from the prior four months were revised upward, making March’s increase the smallest since October.
The gains show a slow but steady upswing in the activity at factories, utilities and mines. But analysts expected a rise of 0.7 percent, according to a survey by Thomson Reuters.
It is the ninth straight monthly increase. The index’s consistent gains, however muted, suggest the economic recovery is durable.
The nation’s industries were operating at 73.2 percent of their full capacity — a 0.2 percent increase from February, but still 7.4 percentage points below the average since 1972.
Economists mostly cheered the results, noting manufacturing’s return to strength
Manufacturing has been a rare bright spot amid the sluggish economy. Its growth is considered crucial to recovery.
The “seesaw pattern” of good and bad months for manufacturing reflects a normal ebb and flow, as businesses draw down inventories then restock, said Cliff Waldman, economist with the Manufacturers Alliance/MAPI.
But Waldman said the factory sector is “in the throes of an impressive economic recovery” thanks to the Obama administration’s stimulus programs and a rebound in exports to Asia and elsewhere.
March also marked the third straight month of increased activity in mines — the longest winning streak in four years.
Kevin Jones of The Trucker staff can be reached for comment at email@example.com.
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