Factories boost output for 9th straight month

U.S. factories produced more consumer goods, business equipment and raw materials in March, boosting manufacturing activity for the ninth straight month.

U.S. factories produced more consumer goods, business equipment and raw materials in March, boosting manufacturing activity for the ninth straight month.

Output at the nation's factories, mines and utilities increased 0.8 percent last month after edging up 0.1 percent in February, the Federal Reserve said Friday. February's results were dragged down by a weather-related drop in utility production.

Factory production, the largest single segment of industrial production, increased 0.7 percent last month. Manufacturing has been a key driver of economic growth since the recession ended. That continued last month, even with supply chain disruptions stemming from the crisis in Japan.

Overall industrial production has risen about 12 percent since its recession-low in June 2009. It is still about 7 percent below its pre-recession peak, reached in September 2007.

Construction goods showed the sharpest increase of any major market group, rising 1.5 percent. Still, production of construction goods is 25 percent below its pre-recession peak, reached in December 2006.

Consumer goods also rebounded strongly, increasing 0.9 percent after flat lining for two months. Strong gains were seen for longer-lasting items such as appliances, home electronics and automotive products. Output of products with shorter shelf lives, such as food, clothing and tobacco, decreased.

Automotive output rose 3.6 percent and is more than 15 percent higher than a year ago. An effort to streamline product lines has made the industry more efficient. Consumers are also replacing older vehicles that they held on to during the recession.

Some auto factories have been forced to slow production in recent weeks. The earthquake and tsunami in Japan has limited their access to parts produced in that country.

"It appears that a shortage of parts and supplies will lead to the temporary shutdown of some U.S. autos plants in the next month or two, but it is nevertheless encouraging to see that there was no immediate impact," said Paul Ashworth, chief U.S. economists with Capital Economics,.

The results suggest the economic rebound is spreading to consumers after depending heavily on business spending earlier in the recovery. Consumers spent more in March and the unemployment rate fell to its lowest level in two years.

Production of business equipment rose a modest 0.4 percent, a fraction of its strong increases in the previous three months.

The output of mines rose 0.6 percent in March, while utilities rebounded to increase of 1.7 percent, after two months of steep declines. The overall production of coal decreased, as underground mines faced fresh scrutiny from safety regulators after a series of deadly disasters. But extraction of natural gas and metal ore rose.

American industry operated at 77.4 percent of its total capacity in March, 0.5 percent above February's result. Capacity use remains 3.0 percent points below its average in data going back to 1972.

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