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First Cut: March industrial production registered across-the-board declines in major categories

Industrial production fell 5.4% in March from February as measures to contain the spread of  COVID-19 led to the shuttering of many nonessential manufacturing activity, energy extraction fell due to low prices and low demand, and utilities did not need to generate power during the sudden closure of many businesses. The report said, “Total industrial production fell 5.4 percent in March, as the COVID-19 (coronavirus disease 2019) pandemic led many factories to suspend operations late in the month. Manufacturing output fell 6.3 percent; most major industries posted decreases, with the largest decline registered by motor vehicles and parts. The decreases for total industrial production and for manufacturing were their largest since January 1946 and February 1946, respectively. The indexes for utilities and mining declined 3.9 percent and 2.0 percent, respectively.”A lot of these declines occurred in the second half of March. Activity will be much more affected in April when a full month of closures is evident.

Activity was particularly slow in manufacturing of motor vehicles which fell 28.0% in March. Manufacturing excluding motor vehicles was down 4.5% in March from February.

Output declines in utilities in March was in both electric (-3.8%) and natural gas (-4.5%) month-over-month.

Production in energy in March had widespread declines with oil and gas well drilling down 1.3%.

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