Following the prolonged cold-snap, industrial production increased 0.6% in February 2014, after January’s 0.2% decline. February’s factory output improved 0.8%, the largest upturn in manufacturing production since August 2013. Utilities output retreated 0.2%, and production at mines rose 0.3% in February. Total industry capacity utilization edged up to 78.8% during February, which is 1.3 ppts under its 1972–2012 average. Total industrial production for February 2014 was 2.8% above its level from last year.
The Purchasing Manager Index (PMI) for March 2014 advanced 0.5 ppts to 53.7%, which denotes an expansion in the manufacturing industry for the tenth consecutive month. With the onset of spring, managers expect positive business conditions supported by rising demand. The March 2014 report reflects growth in fourteen of 18 manufacturing industries including petroleum & coal; chemical products; plastics & rubber products; primary metals; fabricated metal products; transportation equipment; and machinery. Among the industries reporting contraction in March were miscellaneous manufacturing; and electrical equipment, appliances and components.
The Consumer Confidence Index climbed to 82.3 in March 2014 compared to February’s reading of 78.3. Consumers were optimistic about the short-term economic outlook as well as future employment prospects, however were dismayed by the limited potential for income growth.
New orders for manufactured durable goods increased 2.2% or $5.0 billion in February 2014, to $229.4 billion after January’s 1.3% decline. A notable driver of this improvement was transportation equipment, which increased 6.9% or $4.6 billion, to a total of $71.4 billion in the wake of two consecutive monthly decreases. Shipments of manufactured durable goods in February were up 0.9% or $2.0 billion, to $234.0 billion following January’s 0.6% retreat.
According to the third estimate, real Gross Domestic Product (GDP) grew at an annual rate of 2.6% in Q4 2013. Real GDP in Q3 2013 increased 4.1%. The increase of real GDP in Q4 2013 reflects positive contributions from exports, personal consumption expenditures, and nonresidential fixed investment. However, Q4 2013’s deceleration of real GDP was attributed to a downturn in private inventory investment and government spending, as well as increased imports.
In February 2014, the chemical and allied products PPI increased to 282.6 from January’s reading of 279.4.