After falling 3.7% in February, largely on supply chain disruptions and weather, manufacturing production rebounded somewhat in March, rising 2.7%. While challenges continue in the supply chain and with rising costs, the manufacturing sector continues to expand strongly overall, with production down just 2.1% since the COVID-19 pandemic began in February 2020. Output in the sector would be expected to return to pre-pandemic levels by the third quarter of this year. Manufacturing activity expanded robustly in both the New York and Philadelphia Federal Reserve Bank districts, but respondents continued to cite supply chain challenges and rapidly rising costs as concerns. Respondents in both regions felt very positive in their outlook for the next six months.
