U.S. manufacturing output increases in March

WASHINGTON — Production at U.S. factories increased solidly in March as output at motor vehicle assembly plants and elsewhere rose, suggesting that manufacturing was turning the corner after being constrained by higher borrowing costs.

Manufacturing output rose 0.5 per cent last month after an upwardly revised 1.2 per cent rebound in the prior month, the Federal Reserve said Tuesday. Factory output was previously reported to have rebounded 0.8 per cent in February. Economists polled by Reuters had forecast factory output rising 0.3 per cent.

Production at factories increased 0.8 per cent year-on-year in March. It edged down at a 0.1 per cent annualized rate in the first quarter after contracting at a 0.9 per cent pace in the October-december quarter.

Manufacturing accounts for 10.4 per cent of the economy. A survey from the Institute for Supply Management early this month showed manufacturing grew for the first time in one and a half years in March.

But with the Federal Reserve expected to delay an anticipated rate cut this year amid stubbornly high inflation, manufacturing is not out of the woods yet.

Motor vehicle and parts output increased 3.1 per cent last month after advancing 3.4 per cent in February. Durable goods manufacturing production rose 0.3 per cent. There were significant increases in the output of aerospace and miscellaneous transportation equipment, and wood products. But output of nonmetallic mineral products, furniture as well as primary metals declined.

Production of nondurable goods rose 0.7 per cent as gains in the output of petroleum and coal products and chemicals offset declines food, beverage and tobacco products.