Analysis on Industrial Production: Fundamentals Strong Despite February Weather Issues
The following is an analysis from Daniel J. Meckstroth, Ph.D., Chief Economist for the Manufacturers Alliance/MAPI, regarding the industrial production report for February 2010.
“The Federal Reserve reported that industrial production increased 0.1 percent in February but manufacturing production fell 0.2 percent,” Meckstroth said. “Unfortunately, severe weather across the coasts of the United States last month disrupted transportation and production schedules. Production in consumer durables industries was particularly affected. An important contributor to the weakness was that Toyota closed several factories in February which rippled adversely through the supply chain. Motor vehicle production fell 4.4 percent in February from the previous month.
“It is encouraging, though, that when motor vehicles and parts is removed, manufacturing production was actually up 0.1 percent in February,” he added. “We believe that the fundamentals are strong for continued manufacturing recovery driven by pent up consumer demand, repair and replacement of business equipment, and exports. The minor setback in February is expected to be followed by strong makeup gains in March.”