US industrial output beats forecasts in February, but economists cautious
By Alexander Bueso
Date: Tuesday 18 Mar 2025
(Sharecast News) - Industrial production in the US jumped last month as aircraft and automobile manufacturing rebounded.
According to the Department of Commerce, in seasonally adjusted terms industrial output grew at a month-on-month pace of 0.7% during the month of February (consensus: 0.2%).
By major industry groups, output from manufacturing jumped by 0.9% versus January, that of mining by 2.8% but that of Utilities shrank by 2.5%.
January's initially reported rise of 0.5% in total industrial production was revised down to show an increase of 0.3%.
Capacity utilisation grew by five tenths of a percentage point to 78.2% (consensus: 77.8%).
Manufacturing of durable goods was led by that of automobiles, whilst that of non-durables edged higher by just 0.2%.
Total industrial production was up by 1.4% year-on-year.
"We do not think today's release is a sign of things to come. Excluding motor vehicle production, manufacturing output rose by a much smaller 0.4% m/m," was the verdict from Bradley Saunders at Capital Economics.
"Meanwhile, the fall in the ISM manufacturing index in February, led by a sharp drop in the new orders component, suggests March's data are likely to be weaker. With the drag from tariffs still yet to properly take effect, we believe there is downside to come for industry over the coming months."
Bernard Yaros at Oxford Economics was of a similar view, telling clients: "The industrial sector won't regain its stride until 2026 when the interest-rate loosening cycle will resume in full and North American tariffs will be largely removed."
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