Industrial Production Off in March

Washington, DC, April 18, 2007--Industrial production dropped 0.2 percent in March as utility output fell as a result of  sizable cold weather gains in February, according to a report from the Federal Reserve

The Fed said that said utility output fell 7.0 percent in March after a 7.6 percent gain in February, more than offsetting a healthy 0.7 percent March gain in manufacturing output.

Analysts had expected a gain of 0.1 percent after February output expanded by a downwardly adjusted 0.8 percent.

Capacity unilization during the month rose to 80.1 percent from 79.7 percent in February. Mining capacity use was flat at 90.9 percent, while utility capacity fell to 83.5 percent from 89.8 percent.

The March data brought industrial output growth for the first quarter to an increase of 1.4 percent, nearly recouping the 1.5 percent fall recorded in the fourth quarter of 2006.

Driving the March manufacturing output growth was a 0.7 percent rise in chemical output and a 0.9 percent rise in plastics and rubber products. Machinery output rose 1.0 percent, while computer and electronics production rose 2.0 percent.

Motor vehicle and parts output rose 0.2 percent, while motor vehicle assemblies slipped to a seasonally adjusted annual rate of 10.64 million units from 10.69 million in February.