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Industrial production up 0.7% in April on strong mining activity
COLD weather and strong mining activity combined with a solid showing by manufacturing firms to drive a jump in US industrial production in April, the Federal Reserve reported on Wednesday.
Even the sharp decline in production of cars and vehicle parts was not enough to dampen the strong start to the first quarter, according to the data.
Total industrial production jumped 0.7 per cent compared to March, slightly better than economists expected, and was 3.5 per cent faster than April 2017.
The output gain in March was revised higher, also to 0.7 per cent, but the prior months were revised downward, meaning the production gain in the first quarter of the year was 0.6 percentage points lower than previously reported.
Still, the April data reflected broad strength across nearly all sectors and bodes well for growth in the second quarter.
The "below-normal temperatures" last month drove a 1.9 per cent increase in utilities, which included a 10 per cent surge in gas due to the strong demand for heating, the report said.
Mining output rose 1.1 per cent, and was 10.6 per cent higher than the same month of 2017, fuelled by gains in oil and gas extraction, which offset the decline in coal mining.
The key manufacturing sector posted a 0.5 per cent output increase, which included gains of more than one per cent in machinery, computer and electronic products, electrical equipment and appliances, and aerospace and transportation equipment.
However, motor vehicles and parts dropped 1.3 per cent, the first decline since November, even while production was more than 3 per cent above April 2017.
Wood products was the only other category that saw a drop of more than one per cent.
Total industrial capacity in use in the month rose to 78 per cent, the highest since March 2015 but still nearly two points below the long-run average, the Fed said.
Capacity utilisation in the manufacturing sector continued its slow but steady rise to 75.8 per cent. AFP