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Business & Finance

US industry in March struggles to rebound from storm: Fed

  • Manufacturing output rose of 2.7 percent, and mining posted growth of 5.7 percent, the report said.
15 Apr 2021

WASHINGTON: American factories last month clawed back some, but not all, of the ground lost when bad weather disrupted production in February, the Federal Reserve said on Thursday.

Industrial production increased 1.4 percent in March compared to the prior month, below analysts' expectations and less than the 2.6 percent decrease in February as winter storms caused disruptions in parts of the United States.

Manufacturing output rose of 2.7 percent, and mining posted growth of 5.7 percent, the report said.

But the utilities sector continued to be a drag, and output saw its biggest-ever drop of 11.4 percent.

"The demand for heating fell because of a swing in temperatures from an unseasonably cold February to an unseasonably warm March," the report said regarding the utilities sector.

In manufacturing, Ian Shepherdson of Pantheon Macroeconomics called the mere 2.8 percent rebound in motor vehicle production after its 10 percent plunge in February as "hard to fathom" given strong demand for vehicles.

He said "we have to expect catch-up gains over the next couple months."

The data meant total industrial production for the first quarter of 2021 posted 2.5 percent annual growth, far short of the 8.4 percent rate reported in the fourth quarter of last year amid industry's rebound from the slump caused by Covid-19.

On the one year anniversary of the start of the pandemic's business disruptions, only manufacturing had managed to fully recover from the downturn, and was up 3.1 percent compared to March 2020.

Utilities were however 0.2 percent lower, and mining 8.8 percent underwater, likely due to the oil industry struggling amid low prices.