Macro Flash Report


Industrial production increased in line with expectations while the manufacturing subindex beat them. The trend is encouraging, especially given the ISM Manufacturing PMI finally pushing into expansion territory, joining the S&P Global Manufacturing PMI with its 3-month expansionary trend. However, the important question from here is how much of the increased activity was based on last years expectations for rate cuts as early as March.

Industrial & Manufacturing Production

March’s Industrial Production increased by 0.4%, matching market expectations and sustaining the growth rate from an upwardly revised 0.4% in February from 0.1%. For the first quarter of the year, industrial production decline by 1.8% year-over-year. Specifically, outputs in the manufacturing and mining sectors decreased by -0.1% and -1.4%, respectively. This quarterly downturn highlights the challenges facing the industrial sector, despite some positive monthly performance metrics.

Manufacturing (SIC) Production, which constitutes 78% of total industrial output, rose by 0.5%, following a notable 1.2% increase in February after upward revisions from 0.8% growth and beat the forecasted 0.2%. The sector saw mixed results across its divisions, but this increase was mainly propelled by a 3.1% surge in the production of motor vehicles and parts, which drove durable goods manufacturing up by 0.3%. For the first quarter of the year, factory output dipped slightly, showing a 0.1% annual decrease. This reflects underlying challenges in the manufacturing sector, which is experiencing uneven growth across its various segments.