FRANKFURT / MOSCOW (Dow Jones) – The rise in industrial production in the U.S. has weakened as expected in February, which was mainly due to the adverse weather conditions. (Photo: ddp)
Bank economists expected, according to the growth of U.S. industry in the current month have increased again, what lies at the temporary nature of the weather and which suggest the existence and the development of the sentiment indicators. Thus, the manufacturing sector should continue to remain a driver of economic recovery.
As the Federal Reserve announced on Monday that industrial production rose by 0.1% over the previous month. This corresponded to the expectations of customers surveyed by Dow Jones Newswires Bank economists. Production has risen to eight months in a row. In January, industrial production had risen by 0.9% in December had the plus amounted to 0.5%.
At the same time, capacity utilization rose in February to 72.7%. This is the highest level in 15 months. Economists had expected a level of 72.5%. The capacity utilization in January was provisionally to 72.5% (revised: 72.6%). Between 1972 and 2008 the capacity was utilized in an average of 80.6%.
Reason for the slow increase in production in the U.S. industry had been estimated by the Bank’s economists, the heavy snowstorms in the U.S. east coast. The bad weather had burdened mainly the activity in the manufacturing sector, although the slowdown was only temporary. The snowstorms of 4 to 7 February and 9 to 11 February on the U.S. East Coast had meant that factories had to achieve a shortened their shifts.
In the manufacturing sector, which represents a large proportion of industrial production in February was within one month, a production decline of 0.2% (previous month: recorded plus 0.9%). The production of cars and auto parts fell by as much as 4.4%. Under excluding the auto production, industrial production stagnated.
For the suppliers, the data showed that an increase of 0.5% (plus 0.6%). The production of capital goods increased by 0.4%, a rise in materials was reported by 0.3%. The mining sector recorded a strong increase of 2.0% (up 1.1%).
Postbank economist Thilo Heidrich considered the outlook for the further development of industrial production, despite the "mixed picture" in the details to be positive. The bottom line remains noted that the U.S. industry increase its next series, despite the adverse weather continued. "The sentiment indicators suggest the manufacturing sector also point out that are expected in the coming months, further gains," said Heidrich.
Even Nord / LB economist Bernd Krampen sees the recovery trend in the U.S. industry as ever. The snowstorms have hampered the special factor of the development in the manufacturing sector, "but what for some catch-up in March, says," said staples. Overall, the medium recognizable Erholungspfad fit to the general mood in the manufacturing sector, as indicated, it would have of the Philadelphia index, or even the national ISM index. The economist, therefore, provides "a positive first signal of what is already the end of April ahead of GDP figures for the first quarter of 2010."
Commerzbank economist Christoph Balz also assumes that the production of its "steep upward trend" will start in March. In addition, the economist, his attention is directed to the development of capacity utilization, which is still low level of negligible risk of inflation talk. "Accordingly, the Fed will continue to make little worried about potential inflation risks," said Balz. The combination of rising production and an available capacity and dwindling let also expect increased investment by businesses in the coming months. This would imply that investment should underpin growth in 2010.
-By Katrin Haertel, Dow Jones Newswires, +49 (0) 69 297 25 300,
konjunktur.de @ dowjones.com
DJG / kth / hab / sh