Factories Increase Output

U.S. factories produced more consumer goods, business equipment and raw materials in March, boosting manufacturing activity for the ninth straight month.

Output at the U.S. factories, mines and utilities increased 0.8% last month after edging up 0.1% in February, the Federal Reserve said Friday. February's results were dragged down by a weather-related drop in utility production.

Factory production, the largest single segment of industrial production, increased 0.7% last month. Manufacturing has been a key driver of economic growth since the recession ended. That continued last month, even with supply chain disruptions stemming from the crisis in Japan.

Overall industrial production has risen about 12% since its recession-low in June 2009. It is still about 7% below its pre-recession peak, reached in September 2007.

Construction goods showed the sharpest increase of any major market group, rising 1.5%. That's an encouraging sign for an industry that continues to struggle due to the sluggish markets for housing and commercial real estate. Still, production of construction goods is still 25% below its pre-recession peak, reached in December 2006.

The output of mines rose 0.6% in March, while utilities rebounded to increase of 1.7%, after two months of steep declines.

American industry operated at 77.4% of its total capacity in March, 0.5% above