US Industrial Production: Manufacturing sector remains in good shape - Wells Fargo
|Analysts from Wells Fargo, explained that utilities accounted for more than half the gain of 0.5% in March Industrial Production.
Key Quotes:
“Industrial production expanded 0.5 percent in March, which was slightly ahead of expectations for a 0.3 percent increase. What’s more, March’s gain followed a 1.0 percent rise in February, which helped output expand at a 4.5 percent annualized clip over the first quarter.”
“More than half of March’s gain can be traced to a rebound in utilities output.”
“The average temperature for the contiguous U.S. was fairly typical for March, but that followed an above-average February in which heating needs were more modest than usual. Moreover, the heavily populated Northeast and South faced reoccurring winter storms and below average temperatures.”
“Meanwhile the mining sector continued its recovery from the sharp downturn that followed the collapse in oil prices.”
“Manufacturing output was the weakest spot in today’s report, increasing just 0.1 percent. That gain comes on the heels of an upwardly revised 1.5 percent rise in February, however, which is now the largest monthly gain since the economy was coming out of recession in 2009.”
“The fact that the manufacturing sector was able to notch a gain on top of February’s substantial increase suggests that, overall, the manufacturing sector remains in good shape.”
“In addition, not only did core capital goods orders rebound solidly in February, but the ISM manufacturing index remains near its cycle highs.”
“The most recent gauges of factory activity point to some cooling, however.”
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