Autos rebound big push for U.S. manufacturing output gain

A sharp rebound in automotive output in March spurred a third straight monthly gain in U.S. manufacturing activity.

This is probably signalling the worst of the production woes that have dogged the motor vehicle industry over the last year may have passed.

Industrial activities in the US moderated to +5.5%yoy in Mar-22 from 8-month high +7.5%yoy recorded in the previous month. On monthly basis, the overall industrial output rose +0.9%mom (Feb-22: +0.9%mom), higher than market expectations of +0.4%mom.

Manufacturing output

The steady expansion of IPI reflects firming domestic economic activities and also lead to lower unemployment rate which at new pandemic low 3.6% in Mar-22.

Aside from supply-induced inflation, the Fed is seen to tighten its monetary policy at faster pace in the upcoming FOMC meeting in May due to strengthening domestic demand and economic activities.

However, soaring global commodity prices may drag industrial activities in the US amid higher input costs and supply chain tightness effects.

On a flip side, the elevated commodity prices may cause mining and agriculture players in the US to expand production in the near term. – MIDF