April 16 (Bloomberg) — Industrial production rose more than forecast in March after a February gain that was twice as big as previously estimated, indicating U.S. factories recovered after a weather-depressed start to the year.
Output at factories, mines and utilities climbed 0.7 percent after a revised 1.2 percent increase the prior month, figures from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.5 percent rise. Manufacturing, which makes up 75 percent of total production, grew 0.5 percent after surging 1.4 percent.
The figures follow recent data showing stronger retail sales and increasing employment that indicate the economy was gaining momentum as temperatures warmed. A pickup in corporate investment and further improvement in overseas markets would complement demand for motor vehicles and provide an additional boost for U.S. producers.
“Manufacturing wasn’t immune to the weather effect, so we’ll continue to see some bounce back in the next few months,” Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “It’s similar to what we’re seeing in the rest of the economy. Underlying demand is improving.”
Another report today showed home construction rebounded less than forecast in March and building permits declined. Housing starts climbed 2.8 percent to a 946,000 annualized rate, according to the Commerce Department. The median forecast in a Bloomberg survey called for 970,000 starts.
Stock-index futures held earlier gains after the figures and as Yahoo! Inc. earnings topped estimates. Standard & Poor’s 500 Index futures expiring in June added 0.5 percent to 1,848 at 9:19 a.m. in New York.
Industrial production estimates of the 79 economists surveyed by Bloomberg ranged from no change to an increase of 1 percent after a previously reported 0.6 percent increase. Manufacturing accounts for about 12 percent of the economy.
Utility output rose 1 percent after a 0.3 percent drop the previous month. Mining production, which includes oil drilling, increased 1.5 percent last month.
The report is consistent with data from the Institute for Supply Management that showed manufacturing accelerated in March, driven by production and orders.
Business-equipment production advanced 0.5 percent after a 2 percent surge in February today’s Fed report showed. Output of construction materials rose 0.2 percent after rising 1 percent. Production of computers and electronic products also increased.