US: Industrial production likely to decline 0.1% in March - Nomura

The analysis team at Nomura, expect a 0.1% m-o-m decline in headline IP of US for the month of March, driven by weaker core factory output and auto assemblies.

Key Quotes

 “In February, total industrial production (IP) rose just 0.1% m-o-m, but core factory output (ex-motor vehicles and parts) increased a strong 0.5%, suggesting a steady improvement in manufacturing activity. In March, we expect a 0.1% m-o-m decline in headline IP driven by weaker core factory output and auto assemblies. Aggregate work hours in the core manufacturing sector declined notably, suggesting weaker activity in this sector.”

“Moreover, industry data suggest vehicle production fell sharply over the month, creating an additional drag on headline IP. Yet, crude oil output and related support activity improved, while utility production likely rebounded strongly as March was colder than the prior two months. However, as core factory output and auto assemblies account for a lion’s share of total IP, the increases in mining and utilities output may not be enough to offset the drag from core factory output and vehicle assemblies.”