Industrial production and capacity utilization.

Released for Publication April 15

The index of indust|al production rose 0.2 percent in March, after having increased a revised 0.5 percent in February. The increase in March was led by gains in the production of durable consumer goods and a pickup in energy output, mainly at utilities. At 107.2 percent of its 1987 annual average, total industrial production in March was 2.1 percent above its year-ago level; but despite the recent gains, it was still about 1 percent below its level of last October. For the first quarter as a whole, industrial production declined at an armuai rate of 4.1 percent, after having fallen 0.7 percent in the previous quarter. Total industrial capacity utilization rose O. 1 percentage point in March, to 78.1 percent.

When analyzed by market group, the data show that the production of durable consumer goods increased 0.5 percent in March because of gains in the production of trucks, appliances, and furniture; output of autos declined last month. The output of nondurable consumer goods rose 0.4 percent in March, boosted by a sharp increase in energy for residential use. The production of business equipment excluding motor vehicles increased 0.2 percent as most major categories posted gains; however, even after allowing for the effects of a strike at a major producer of construction-related machinery, the output in this sector has remained weak and has changed little, on balance, over the past year. The production of construction supplies edged lower last month and, on average, the output in the first quarter was a bit below that of the previous quarter. Materials output rose 0.2 percent because production of energy materials, which had declined during the relatively mild winter, rebounded in March. The output of nonenergy materials, which fell noticeably in December and January, rebounded partially in February but was unchanged in March; the recent weakness in both durables and nondurables has been widespread.

When analyzed by industry group, the data show that manufacturing output edged up O. 1 percent in March but that capacity utilization at factories declined 0.1 percentage point, to 77.0 percent. In March, the operating rates for both primary and advanced processing edged down. Within primary processing, capacity utilization for chemicals, for stone, clay, and glass products, and for fabricated metals declined, but most other primary-processing industries posted gains. Within advanced processing, the factory operating rate increased noticeably for furniture and fixtures but declined for instruments; most other major advanced-processing industries posted small and nearly offsetting changes. On the whole, the utilization rates both for primary and advanced processing have weakened since last fall, with large declines for transportation equipment, paper and products, rubber and plastic products, primary chemicals, and miscellaneous manufactures.

The production at mines decreased 0.2 percent in March. The output at utilities jumped 2.1 percent, after having been curtailed over the winter months because of the unseasonably warm weather.