US industrial production expanded in April by 0.7% m/m, as compared with consensus projections of 0.3% growth. The surge in industrial production was due to a sharp growth in utilities production that expanded 5.8% m/m, as compared with March’s decline of 3.3%. Meanwhile, mining output continued with its declining trend, dropping 2.3% m/m, whereas manufacturing output grew 0.3% m/m, as compared with March’s decline of 0.3%.
Durable goods manufacturing rebounded 0.6% m/m. Machinery production grew 2.4% m/m stimulating the growth in durable goods manufacturing. Nondurable goods manufacturing was flat in April, countering the growth in durable goods output with drop in petroleum refining and chemicals that fell 1.8% and 0.3% respectively. Annual growth in manufacturing output came in at 0.4% y/y last month in spite of constant headwinds from weak growth outside of the US.
The above expected gains in utilities production suggest additional consumer utilities consumption in April as compared to earlier expectations, said Barclays in a research report. This was partly countered by a sharp decline in oil and gas well drilling that lowered the forecast of structures investment, added Barclays.
“On net, we are now tracking 3.1% real consumption growth in Q2 and 2.3% real GDP growth”, noted Barclays.
