Source: Economics Group of Wells Fargo Bank, N.A.
Summary
After spending the better part of the past year in the doldrums, the factory sector is showing signs of life. Industrial production rose 0.4% in March, coming on the heels of an upward revision to February. The outturn marks two consecutive months of increases for the first time since early 2023.Two Isn’t a Coincidence
After spending the better part of the past year in the doldrums, the factory sector is showing signs of life. Industrial production rose 0.4% in March, coming on the heels of an upward revision to February. The outturn marks a two-month gaining streak for the first time since early 2023.
Manufacturing production, which accounts for the majority of total industrial output, increased 0.5% in March and saw a decent upward revision to the prior month’s data. Production of motor vehicles increased nearly 5% over the month in a sign that the auto industry is continuing to gradually recover from the pandemic and strike-related disruptions. Production of rail & ship (3.0%) and aerospace (0.6%) equipment also saw decent gains. The overall strength in transportation equipment indicates some awakening in capital expenditures; we suspect real business equipment spending expanded at a 2% annualized rate in Q1. In the nondurable goods space, petroleum & coal refineries saw production ramp up 4.8% during the month.