Why It Matters to Distributors: Moderate, uneven industrial growth points to steady but selective demand, with strength in business investment categories and softer conditions in construction and consumer-driven segments.
U.S. industrial production rose modestly in February, as gains in manufacturing and mining were partly offset by weaker utility output, according to data released March 16 by the Federal Reserve.
Total industrial production increased 0.2% in February, following a 0.7% gain in January. Output was 1.4% higher than a year earlier.
Manufacturing output, the largest component of industrial production, also rose 0.2% in February. Durable goods production edged up 0.1%, with gains in motor vehicles and parts offset by declines in machinery. Nondurable goods output increased 0.2%, led by chemicals, plastics, and paper products, while production declined in petroleum, coal, and food-related categories.
Mining output climbed 0.8% for the month, extending to a 0.9% increase in January. Utility output fell 0.6%, driven by a 4.7% drop in natural gas production.
Capacity utilization, a measure of how fully industries are using their resources, held steady at 76.3%. That remains 3.1 percentage points below its long-run average. Manufacturing utilization was unchanged at 75.6%, also below historical norms.
Across major market groups, results were mixed. Business equipment output rose 0.2% and is up 6.4% from a year earlier, one of the strongest performing segments. Materials production increased 0.3%, while construction supplies declined 0.2%. Consumer goods output was flat overall, with gains in durable goods offset by a slight decline in nondurables.
The February data point to a steady but moderate pace of industrial activity, with growth concentrated in business investment-related categories and more limited momentum in consumer and construction segments.
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