Strong Gain in Industrial Output in March

Industrial production increased 0.9 percent in March following a similar 0.9 percent gain in February and a 1.0 percent rise in January. The gains result in a very robust 12.1 percent annualized pace for the first three months of 2022 and pushes total industrial output to its highest level ever, and clearly above the December 2019 level prior to the pandemic (see first chart). Over the past year, total industrial output is up 5.5 percent.

Total industrial capacity utilization increased 0.7 points to 78.3 percent from 77.7 percent in February, the highest since January 2019 (see first chart). However, total capacity utilization remains well below the long-term (1972 through 2021) average of 79.5 percent.

Manufacturing output – about 74 percent of total output – also posted a 0.9 percent increase for the month (see first chart). Manufacturing output is at its highest level since July 2008 and is 2.9 percent above its December 2019 pre-pandemic level (see first chart). From a year ago, manufacturing output is up 4.9 percent.

Manufacturing utilization increased 0.3 points to 78.7 percent, well above the December 2019 level of 75.6 percent and the highest level since July 2007, and slightly above its long-term average of 78.1 percent. However, it remains well below the 1994-95 high of 84.7 percent (see first chart).

Mining output accounts for about 14 percent of total industrial output and posted a strong 1.7 percent increase last month (see top of second chart). Over the last 12 months, mining output is up 7.0 percent.

Utility output, which is typically related to weather patterns and is about 12 percent of total industrial output, rose 0.4 percent (see top of second chart) with natural gas off 2.9 percent but electric up 0.9 percent. From a year ago, utility output is up 7.5 percent.

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