U.S. industrial production rose for a second month in March, driven by a bigger-than-expected rise in factory output as the manufacturing sector shows new signs of stabilization.
The 0.4% increase in output at factories, mines and utilities matched the previous month's revised increase, Federal Reserve data showed Tuesday. Mining and energy extraction fell, while utility production rebounded.
Manufacturing output rose 0.5% last month, led by motor vehicles and aircraft, after rising by the most in a year in February.
The manufacturing sector, which accounts for three-quarters of total industrial production, is showing signs of improving after more than a year of sluggish activity.helped by resilient consumer demand.
Earlier this month, the Institute for Supply Management's measure of March manufacturing activity in the United States moved into expansion territory due to stronger demand and a rebound in production.
At the same time, progress has been gradual as U.S. producers face tepid export markets and higher borrowing costs limit capital spending. Input costs for key raw materials such as oil have also increased.
Despite the rebound in February and March, factory activity was weak in January. In the first quarter, manufacturing production decreased 0.1%. This was the fifth decline in the last six quarters, but it was much smaller than the other declines.
