The Daily Update: US Industrial Production Miss

Yesterday it was reported that in the US industrial production fell sharply in February, with overall production falling by -2.2% (largest decline since April last year). The market estimates had been for a .3% increase. Manufacturing output and mining production fell 3.1% and 5.4%, respectively however, the output of utilities did increase 7.4%, the biggest rise since March 2017, driven by increased demand for heating. According to the report accompanying the release ‘The severe winter weather in the south-central region of the country in mid-February accounted for the bulk of the declines in output for the month. Most notably, some petroleum refineries, petrochemical facilities, and plastic resin plants suffered damage from the deep freeze and were offline for the rest of the month. Excluding the effects of the winter weather would have resulted in an index for manufacturing that fell about .5% percent and in an index for mining that rose about .5% percent. Both indexes would have remained below their pre-pandemic (February 2020) levels’.