April 16, 2025
Industrial production for March declined 0.3% after having jumped 0.8% in February. In the past year industrial production has risen 1.3%.
Breaking industrial production down into its three basic categories — manufacturing, mining, and utilities. Manufacturing production rose 0.3% in March after jumping 1.0% in February. This is the fifth straight increase in manufacturing production. In the past year manufacturing output has risen 1.0%.
Motor vehicle sector production rose 1.2% in March after having surged 9.2% in February after having fallen 5.3% in the previous month. In the past year it has declined 4.9%. This category is very volatile on a month-to-month basis. Some of the increase the past couple of months represents a step up in production in an effort to avoid tariffs.
Excluding the motor vehicle sector, manufacturing output rose 0.3% in March after climbing 0.5% in February after having risen 0.5% in January. This is the fourth consecutive increase in this series. In the past year it has risen 1.4%. The imposition of tariffs is providing a lift to the domestic manufacturing sector.
High tech production rose 0.3% in March after climbing 0.8% in February after spiking 3.5% in January.. High tech production has risen 11.3% in the past year. We would suggest that if firms are unable to find an adequate supply of workers, they will turn to technology in an effort to boost production and satisfy the demand for their products. At the same time firms are all experimenting with AI in an effort to figure out how it might help them boost productivity. Thus, we expect high tech production to continue to climb rapidly in the months ahead.
Mining (14%) output rose 1.2% in March, gained 1.4% in February, and 0.9% in January. Mining has declined 7.4% in the past year.
Utilities output fell 5.8% in March after declining 1.5% in February after having surged by 4.5% in January as bitter cold weather gripped much of the country. Over the past year utility output has risen 4.4%. This component is extremely volatile from month-to-month as the weather fluctuates.
Capacity utilization in the manufacturing sector rose 0.2% in March to 77.3% after rising 0.7% in February, after having been unchanged in January. The utilization rate is slightly below the 77.4% level that is generally regarded as effective full capacity utilization.
Stephen Slifer
NumberNomics
Charleston, SC
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