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US manufacturing flat in March, capping weak Q1
WASHINGTON, April 17, 2019 (BSS/AFP) – American manufacturing was flat in
March, which was good news after sharp declines in the prior two months that
combined for a dismal first quarter, the Federal Reserve reported Tuesday.
The weak performance has contributed to fears about a slowing US economy,
as fuel from the late 2017 tax cuts faded and as the auto industry continues
to struggle. It also dragged overall industrial production down slightly in
the month.
Manufacturing fell 1.1 percent in the first three months of the year
compared to the same period of 2018, the Fed reported. However, output in
March was still 1.0 percent higher than a year earlier.
The production of motor parts and vehicles plunged 2.5 percent in the
month and collapsed 12.8 percent in the first quarter, according to the data,
meaning it is 4.5 percent below the March 2018 output level.
Wood products also fell more than 2 percent compared to February, while
only computer and electronic products and primary metals had gains of over 1
percent in the latest month.
Overall industrial output fell 0.3 percent in the first quarter, after a
0.1 percent dip last month, but is up 2.8 percent compared to March 2018.
Economists had been expecting a 0.2 percent gain for the month.
“In short, the data have been volatile in recent months, led by swings in
autos, but the net result has been weakening,” said Jim O’Sullivan of High
Frequency Economics, noting that “manufacturing is especially export-
oriented.”
Mickey Levy of Berenberg Capital Markets agreed the data were “decidedly
soft” but said the US performance remained “far better than the sharp
declines experienced in other major economies.”
And Levy said regional manufacturing surveys were on the rise again and
“appeared to have bottomed out in December-January.”
Mining output, including oil, gas and coal production, fell 0.8 percent
compared to the prior month but that is 10.5 percent higher year-over-year.
The volatile utilities sector edged up 0.2 percent after a surge in
February, and is 3.8 percent higher than the same period a year ago.
Industrial capacity in use in use in March slipped to 78.8 percent due to
a decline in utilization for durable manufacturing, most notably in motor
vehicles and parts, which fell a stunning two percentage points to 76.3
percent in a single month.
BSS/AFP/HR/0915