Industrial production and capacity utilization both increased in March, albeit not notably so, extending the increases tallied the month before. All told, this was an affirmation that the nation's economy, though slowing down somewhat in March, still ended the quarter in decent fashion. In all, we continue to expect that the nation's gross domestic product rose by close to 3% in the recently ended three months. However, we continue to expect that growth will backtrack some in the current period.
Specifically, industrial production increased by an estimated 0.4% last month, on the strength of materially greater output at the nation's mines. All told, the March composite figure narrowly beat expectations, which had called for an overall gain of 0.3%. In February, the upwardly revised figure showed a rise of 1.1%. Earlier, the estimated increase had been tabulated at 0.8%.
Breaking the report down into its individual components, we see that among the three groups comprising the industrial production category, we find that manufacturing activity eased by 0.1% last month. We also note that output at the nation's utilities fell by 0.2%. However, production at the nation's mines jumped by an outsized 5.3% last month. That was the third straight strong increase in this most volatile category, following a sharp decline in December.
At the same time, capacity utilization at the nation's factories rose to 78.5% in March, which was modestly ahead of the February estimate of 78.3%. The February figure was unchanged from the prior estimate for that month.
Here, as well, we saw slippage in manufacturing, the largest individual category, with that sector declining from 86.6% to 86.4% last month. Mining output also eased, falling from 87.9% to 87.5%. However, utilities usage rose, climbing from 78.7% in February to 82.9% in March.
Overall, this was a decent, but not exceptional report, especially given the weakness in manufacturing. The slippage in that area was in line with the overall weaker growth in manufacturing seen at the start of this month.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.