Manufacturing production increased solidly last month, according to the Federal Reserve. NAM Chief Economist Chad Moutray laid it out for us.
The topline numbers: “Manufacturing production grew 1.2% in February, the fastest monthly gain since October,” said Moutray. “Durable and nondurable goods both increased 1.3% and 1.1% for the month, respectively.”
Challenges: Manufacturers have had to grapple with supply chain bottlenecks, labor shortages, rising production costs and, more recently, the spread of the omicron variant.
- “These data speak to the resilience of the sector amid still-solid demand,” Moutray said.
- Manufacturing capacity utilization increased from 77.1% in January to 78.0% in February, the strongest reading since September 2018.
- Overall, manufacturing production has risen 7.4% year-over-year, with 2.9% growth relative to February 2020’s pre-pandemic pace.
More details: Underlying manufacturing data were mostly positive. Sectors that saw some of the largest increases in February included nonmetallic mineral products (up 3.5%), aerospace and miscellaneous (up 3.2%), apparel and leather goods (up 3.0%), wood products (up 2.6%) and furniture and related products (up 2.5%).
The big picture: “Meanwhile, total industrial production increased 0.5% in February, slowing from the 1.4% gain in January,” said Moutray.
- “The industrial production index reached its highest level since December 2018. Mining production edged up 0.1% in February, but output in the utilities sector fell 2.7% on warmer temperatures. On a year-over-year basis, industrial production has increased 7.5%, with mining output up 17.3% but with utilities production down 1.2% over the past 12 months. Total capacity utilization jumped from 77.3% in January to 77.6%, the best reading since May 2019.”