WASHINGTON — U.S. industrial production rose a slight 0.1 per cent in February, as an increase in utilities and mining offset the second straight monthly drop in manufacturing.
The Federal Reserve said Friday that the manufacturing component of the index fell 0.4 per cent last month, after having fallen 0.5 per cent in January. Factory production has slipped 1 per cent during the past 12 months.
The declines in manufacturing activity point toward lower economic growth, though not necessarily a slide into a recession, said Gregory Daco, chief U.S. economist at Oxford Economics.
"Looking ahead, we continue to expect slower momentum, but we caution against a recession bias as growth slows," Daco said. "Business confidence surveys have softened amid headwinds from slower global growth, trade tensions, reduced fiscal stimulus and a stronger dollar, but domestic fundamentals remain generally solid."
The report adds to recent evidence of a slowdown in manufacturing, a possible byproduct of weaker global growth and the import taxes imposed by President Donald Trump.
Orders for non-transportation goods have tumbled in two of the past three months, according to the Commerce Department. The pace of factory growth is slowing, according to the manufacturing index of The Institute for Supply Management, an association of purchasing managers.
In the Fed's industrial production report, motor vehicles and parts suffered a 0.1 per cent slip in output. Machinery fell 1.9 per cent. Furniture products declined 1.5 per cent. Non-metallic minerals and apparel also declined.
Utility output climbed 3.7 per cent as more people used electricity. Mining rose 0.3 per cent.
Overall industrial production has risen 3.5 per cent from a year ago. But there may be a slowdown coming as capacity utilization has fallen to 78.2 per cent from 78.8 per cent in November.