U.S. industrial production rises in April, manufacturing activity sees stable momentum

Industrial production in the U.S. came in slightly stronger than anticipated in April. The headline industrial production output rose 0.7 percent, keeping pace with the March print, which was upwardly revised by two-tenths, to 0.7 percent. The miss relative to expectations came from the area of manufacturing production, which rose 0.5 percent as against expectation of a modest fall of 0.1 percent. Utilities and mining production recorded healthy rises, as was expected. Overall, today’s report indicates towards stable momentum in manufacturing activity, in line with recent PMI surveys.

Looking into details, strength in manufacturing production was mainly driven by categories excluding motor vehicles and parts, especially machinery, computers and electronics. Stripping autos, manufacturing production rose 0.6 percent. Motor vehicle assemblies dropped 1.3 percent. The fall was slightly lower than anticipated, and is widely in line with the moderation in auto sales in recent months. Production of utilities rose 1.9 percent sequentially, driven by a sharp rise in natural gas output. Mining production rose 1.1 percent, a third strong month of rise.

“Motor vehicle assemblies suggest slightly higher inventory accumulation this quarter. In all, our Q2 GDP tracking was unchanged at 3.0 percent, after rounding”, stated Barclays.

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