US industrial production falls on car-making and mining

Industrial production in the US fell back for a second consecutive month in March, led by drops in mining and car manufacturing.

On Friday, the Federal reserve reported that production was down by 2% year-over-year, with weak demand from the overseas market leading to overall production decreasing for the year by 0.6%.

Motor vehicle and car parts production decreased by 1.6%, despite rising by 1.6% the month before. However, as the value of the dollar continue to fall, manufacturing may well be set for a rebound.

Steve Murphy, an economist from Capital Economics, said the sector was “showing a Lazarus-like rise from the dead”.

A survey by the Institute for Supply Management reported production rose in March, with experts largely seeing these surveys as an indicator of future output.

The Fed’s Empire State index, a report which measures manufacturing activity in New York State, also rose, climbing to its highest level in over a year.

However, in the coming months, mining is expected to continue its current decline. On Wednesday, Peabody Energy – the largest US coal mining company – filed for bankruptcy, which does not bode well for the sector as a whole.

The industry has already suffered as a result of low oil prices, clean energy, and mounting government regulations.

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